Amer Sports Annual Report 2006 by rku10038

VIEWS: 339 PAGES: 118

									ANNUAL REPORT 2006
CONTENT   Amer Sports

          Business segments            Inside cover
                                                      Board of Directors report and financial statements

                                                      Board of Directors report                      56
          Amer Sports in brief                    1   Five-year review                               63
          Year 2006 in brief                      2   Consolidated income statement                  64
          CEO’s review                            4   Consolidated balance sheet                     65
          Vision, mission and values              6   Consolidated cash flow statement                66
          Market environment                      8   Consolidated statement of changes
          Strategy                               10   in shareholders’ equity                        67
          Financial targets                      12   Notes to the consolidated financial statements 68
          Strong global brands                   14   Calculation of key indicators                  87
                                                      Parent company’s financial statements           88
          Amer Sports athletes                  16    Shares and shareholders                        94
                                                      Board of Directors report’s and
          Business segments                           financial statement’s signatures               101
          Salomon                               18    Auditor’s report                              101
          Wilson                                26
          Precor                                34    Corporate governance                         102
          Atomic                                38    Board of Directors                           108
          Suunto                                42    Executives                                   110
                                                      Information for investors                    112
          R&D                                   46    Contact information
          Sales and distribution                48
          Human resources                       50
          Social responsibility                 52
AMER SPORTS BUSINESS SEGMENTS
                                             The leading outdoor and winter sports company
                                             Salomon is the world leader in winter sports and is well-established in out-
                                             door sports. Salomon is known for highly innovative and performance-oriented
                                             products. Salomon’s sports include alpine and cross-country skiing, snowboar-
                                             ding, and major outdoor sports such as climbing, hiking, adventure racing and
 Brands: Salomon, Mavic, Arc’teryx, Bonfire
 www.salomonsports.com                       trail running.




                                             The authentic ball sports brand
                                             Wilson is the world’s leading manufacturer of ball sports products.
                                             Its core sports are tennis, squash, badminton, American football,
                                             baseball, basketball, softball and golf.
 Brands: Wilson, DeMarini, Atec
 www.wilson.com



                                             The global fitness equipment leader
                                             Precor is a full-line supplier of technically-advanced, premium-quality fitness
                                             equipment for the commercial and home markets. Its main products are
 Brands: Precor, Cardio Theater, ClubCom     aerobic exercise equipment, strength-training systems and entertainment
 www.precor.com                              systems. Precor is the world’s leading manufacturer of elliptical crosstrainers.



                                             The leading manufacturer of alpine skis
                                             Atomic is the world’s leading manufacturer of alpine skis.
                                             Its sports categories include alpine skiing, cross-country
 Brands: Atomic, Dynamic, Volant
                                             skiing and snowboarding.
 www.atomicsnow.com



                                             The leading manufacturer of sports instruments
                                             Suunto is the leading manufacturer of instruments for a variety
                                             of sports, including diving, training, skiing, hiking, sailing and golf.
 Brands: Suunto, Recta, Bare, Ursuk          Suunto is a market leader in diving computers.
 www.suunto.com
KEY INDICATORS                                                  NET SALES, EUR MILLION                          EBIT, EUR MILLION                                   NET SALES BY GEOGRAPHICAL SEGMENT
                                         PRO FORMA
EUR MILLION                      2006          2005    CHANGE                                                                                 23.6
                                                                                            661
NET SALES                                                                            624*                                                                                         3
  WINTER SPORTS                  345.6         348.6      –1%                                                                                                                                         SALOMON
                                                                                                                                      18.1*
  APPAREL AND FOOTWEAR           208.0         175.6      18%                                                                                                         2                               1 EMEA 65%
                                                                                                                                                                                                      2 AMERICAS 24%
  MAVIC                          107.8          99.3       9%                                                                                                                                         3 ASIA PACIFIC 11%
                                                                                                                                                                                              1
NET SALES, TOTAL                 661.4         623.5       6%
EBIT                              23.6          18.1      30%
  % OF NET SALES                   3.6           2.9
PERSONNEL AT YEAR END            2,372         2,607      –9%                        05     06    * Pro forma                          05      06     * Pro forma




EUR MILLION                      2006          2005    CHANGE
NET SALES                                                         661                                            56.7
                                                                                                                                               54.6
  RACQUET SPORTS                 235.3         225.4       4%                                                                  52.0    52.1                                   3
                                                                                     570    570                                                                                                       WILSON
                                                                         545   543
  TEAM SPORTS                    219.6         203.8       8%
                                                                                                                                                                                                      1 AMERICAS 67%
  GOLF                           114.7         141.2     –19%                                                                                                         2                               2 EMEA 19%
                                                                                                                        31.5                                                                          3 ASIA PACIFIC 14%
NET SALES, TOTAL                 569.6         570.4       0%                                                                                                                                 1
EBIT                              54.6          52.1       5%
  % OF NET SALES                   9.6           9.1
ROCE, 12-MONTH ROLLING AVERAGE    38.4          36.9
PERSONNEL AT YEAR END            1,919         1,914       0%     02     03    04    05     06                   02      03     04     05      06



                                                                                            276
                                                                                                                                              34.8
                                                                                     252
EUR MILLION                      2006          2005    CHANGE                                                                         31.1                                        3
                                                                               210
NET SALES                        275.6         252.1       9%
                                                                  202*                                                  26.8                                              2                           PRECOR
                                                                         176                                    23.4*          23.9
EBIT                              34.8          31.1      12%                                                                                                                                         1 AMERICAS 77%
                                                                                                                                                                                                      2 EMEA 16%
  % OF NET SALES                  12.6          12.3                                                                                                                                                  3 ASIA PACIFIC 7%
ROCE, 12-MONTH ROLLING AVERAGE    50.6          51.2
                                                                                                                                                                                          1
PERSONNEL AT YEAR END             795           733        8%
                                                                  02     03    04    05     06    * Pro forma    02     03     04     05      06      * Pro forma



                                                                                     214                        39.6
                                                                  202          206          205
                                                                         188
EUR MILLION                      2006          2005    CHANGE                                                           28.3   29.6                                                   3

NET SALES                        204.8         214.O      –4%                                                                                                             2                           ATOMIC
                                                                                                                                      22.2                                                            1 EMEA 76%
EBIT                              16.6          22.2     –25%
                                                                                                                                              16.6                                                    2 AMERICAS 18%
  % OF NET SALES                   8.1          10.4                                                                                                                                                  3 ASIA PACIFIC 6%
ROCE, 12-MONTH ROLLING AVERAGE    16.5          20.6
                                                                                                                                                                                          1
PERSONNEL AT YEAR END             893           833        7%
                                                                  02     03    04    05     06                   02     03     04     05      06



                                                                  85
                                                                                            81                  10.5
                                                                         77    77
                                                                                     72
EUR MILLION                      2006          2005    CHANGE                                                                                                                 3
                                                                                                                        7.7    8.0
NET SALES                         81.3          72.0      13%                                                                                 7.0                                                     SUUNTO
EBIT                               7.0           3.4     106%                                                                                                                                         1 EMEA 55%
                                                                                                                                                                                                      2 AMERICAS 33%
  % OF NET SALES                   8.6           4.7                                                                                                                  2                           1
                                                                                                                                                                                                      3 ASIA PACIFIC 12%
ROCE, 12-MONTH ROLLING AVERAGE    30.9          14.8                                                                                  3.4

PERSONNEL AT YEAR END             522           527       –1%
                                                                  02     03    04    05     06                   02     03     04     05      06
                                                                    AMER SPORTS IS THE WORLD’S
                                                                    LEADING SPORTS EQUIPMENT COMPANY
                                                                    We offer technically-advanced equipment and products that improve
                                                                    the performance of active sports participants. Our major brands
                                                                    include Salomon, Wilson, Precor, Atomic and Suunto. The company’s
                                                                    business is balanced by our broad portfolio of sports and our presence
                                                                    in all major markets.




Listed on the Helsinki Stock Exchange since 1977, Amer                 Amer Sports sales organizations operate in 33 countries,       NET SALES                   NET SALES
                                                                                                                                      BY BUSINESS SEGMENT
Sports Corporation had a turnover of 1.8 billion euros and a        allowing us to effectively bring our new products to market
market capitalization of 1.2 billion euros in 2006. At the end of   simultaneously around the globe. Our sales companies have         1   SALOMON 37%             1   BALL SPORTS 32%
                                                                                                                                      2   WILSON 32%              2   WINTER SPORTS EQUIPMENT 29%
the year, Amer Sports employed 6,553 people. We are recog-          experience and specialized expertise for every type of sport.     3   PRECOR 15%              3   OUTDOOR 24%
                                                                                                                                      4   ATOMIC 11%              4   FITNESS 15%
nized world-wide for our sports brands, including Salomon,          Furthermore, our local personnel know their own markets and       5   SUUNTO 5%
Wilson, Precor, Atomic and Suunto.                                  the preferences of sports enthusiasts in their territories.
   Amer Sports provides equipment, technical apparel and               First-class customer service and reliable, efficient and
footwear for a wide variety of athletic activities: winter and      timely supply chain management are core to the Amer Sports                    4
                                                                                                                                                          5
                                                                                                                                                                          4

summer, indoor and outdoor, individual and team, women and          strategy, enabling us to continue to build on strong relation-                            1
                                                                                                                                                                                  1

                                                                                                                                          3
men, adults and children. We focus on products that help ath-       ships with our customers and maintain our market-leading                                          3

letes achieve the best results and most enjoyment from their        position.
                                                                                                                                                                              2
sports. Our range of sports includes tennis, badminton, golf,          We are continuously developing our operations in collabora-                        2

American football, soccer, baseball, basketball, alpine skiing,     tion with our retail partners. The Amer Sports product offering
cross-country skiing, snowboarding, fitness training, cycling,       and services ensure optimal efficiency in the sell-through
running, hiking and diving.                                         process.
   Amer Sports is a year-round, full-service supplier. Our broad       In-depth know-how in each of our sports, together with a       NET SALES
                                                                                                                                      BY GEOGRAPHICAL
range of sports equipment and global presence provide bal-          deep understanding of the consumer, are the keys to bring-        SEGMENT
ance for our businesses as seasons turn and the popularity of       ing innovative new products to market that outperform our
individual sports fluctuate.                                         competitors.                                                      1 AMERICAS 45%
                                                                                                                                      2 EMEA 44%
                                                                                                                                      3 ASIA PACIFIC 11%



                                                                                                                                                      3


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                                                                                                                                                                                                    1
                       AMER SPORTS FINANCIAL REVIEW, PAGES 54–101                       WILSON, PAGES 26–33
    A GLANCE AT 2006   In 2006, Amer Sports Corporation’s net sales were 1,792.7
                       million euros. EBIT came in at 120.2 million euros. Earnings
                                                                                        Wilson’s net sales were flat compared to 2005. Racquet Sports
                                                                                        and Team Sports sales increased, but Golf sales and earnings
                       per share were 0.98 euros. At the end of 2006, the company       fell short of their objectives.
                       employed 6,553 people.
                          The proposed dividend for 2006 is 0.50 euros per share,       PRECOR, PAGES 34–37
                       representing a dividend ratio of 51%. A dividend of 0.50 euros   Precor continued to grow its business in 2006. Sales, par-
                       per share was paid for 2005.                                     ticularly to fitness clubs, have continued to surge in North
                                                                                        America. Much of Precor’s gain in commercial markets is
                       SALOMON, PAGES 18–25                                             drawn from the success of the new Experience line of com-
                       Salomon reached its goals for 2006, supported by improved        mercial cardio equipment.
                       profitability in equipment and strong growth in soft goods.
                       Mavic’s net sales increased but its EBIT declined.




2
                                                                   NET SALES, REPORTED                     KEY INDICATORS
                                                                   EUR MILLION
                                                                                                                                                                                                   PRO
ATOMIC, PAGES 38–41                                                                                1,793                                                         2006       2005        CHANGE   FORMA      CHANGE
                                                                                                           EUR MILLION                                                                       %    2005*          %
Atomic’s sales growth was slowed by poor snow conditions in
                                                                                                           NET SALES                                          1,792.7    1,363.7            31   1,732.0         4
several key markets. In 2006, Atomic won the overall world                                 1,364
                                                                                                           GROSS PROFIT                                         697.4      546.6            28     684.4         2
cups both in alpine skiing (Benjamin Raich, Austria) and in        1,102   1,094   1,036                   EBIT                                                 120.2       82.3            46     117.1         3
cross-country skiing (Tobias Angerer, Germany).                                                              % OF NET SALES                                       6.7         6.0                    6.8
                                                                                                           FINANCING INCOME AND EXPENSES                        –23.6       –9.0                   –24.0

SUUNTO, PAGES 42–45                                                                                        EARNINGS BEFORE TAXES                                 96.6       73.3            32      93.1         4
                                                                                                           NET RESULT                                            70.5       75.4            –6      62.4        13
Suunto is back on the grow path. Suunto developed a new             02      03      04      05      06     EARNINGS PER SHARE, EUR                               0.98       1.05                    0.87
athletic training line that helps users achieve their fitness and                                           RETURN ON SHAREHOLDERS’ EQUITY (ROE), %               12.9       15.1                       -
performance goals with intelligent real-time information and                                               EQUITY RATIO, %                                       33.6       31.8                       -
advice.                                                            EBIT                                    PERSONNEL AT YEAR END                                6,553      6,667                   6,667
                                                                   EUR MILLION
                                                                                                           For a complete set of 2006 key figures, see page 63.
                                                                           117.7                   120.2   Calculation of key indicators, see page 87.
                                                                   103.0           100.5                   Amer Sports stock exchange releases in their entirety can be found on the company’s website at
                                                                                                           www.amersports.com.
                                                                                           82.3

                                                                                                           * In these figures Salomon has been accounted for as from January 1, 2005 .




                                                                    02      03      04      05      06



                                                                                                                                                                                                                     3
    CEO’S REVIEW    Amer Sports experienced an expected year of transition in 2006. Our sales
                    increased 31% as we integrated Salomon for the full year. We also initiated
    ROGER TALERMO

                    several organizational changes. These will not significantly affect the bottom
                    line this year but will position us for stronger future growth.




                    Achieving our growth target of becoming a two-billion euro   GLOBAL DEVELOPMENT
                    company will take a few years. To reach this goal, we are    World-wide, several Amer Sports and Salomon subsidiaries
                    developing our operational structure to gain synergies and   have merged. Quite a few have moved into joint locations to
                    streamline our processes. Many important decisions have      better serve local customers. For example, the creation of our
                    already been made. The transition is underway.               North American Winter and Outdoor organization is an impor-
                                                                                 tant step in strengthening our presence in these categories
                                                                                 in the number one market in the world, the United States.
                                                                                 We also opened an Amer Sports logistics center in the United


4
                                                            NOVEMBER 12
                                                          AIR –10˚C / 14˚F
                                               ALPINE WORLD CUP OPENING
                                                           LEVI, FINLAND


States in Rockdale, Tennessee. Wilson has already moved in,       8% in Team Sports. As expected, Golf was a challenge, but          FUTURE SUCCESS
and Salomon, Atomic and Suunto will follow in 2007.               many improvements were made to move the business into the          We know that at the end of the day, our success is in the hands
   We have continued to streamline and renew quite a few of       black in 2007. Atomic’s sales growth was slowed by poor snow       of sportswomen and sportsmen engaged in their activities of
our internal processes in order to operate more efficiently. Our   conditions in several key markets.                                 choice. It is our ultimate task to provide all people – whatever
Asian sourcing office in Hong Kong has opened, allowing us            Going forward, sports equipment will continue to be our         their level of performance – with products that inspire them
to be closer to our sources and work more effectively with our    core business. Our portfolio of sports remains balanced            to improve their skills, enjoy their activities, and make them
vendors. We expanded the use of our Bulgarian and Romanian        thanks to our presence in every season year-round. We need         proud of the products they use.
Winter Sports sources, and the capacity of Altenmarkt’s ski       to strengthen our leadership position and be recognized as            Amer Sports people world-wide are committed to our
factory was increased by opening up bottlenecks and focusing      the undisputed number one sports equipment company in the          values. Our focus will always be on innovating and serving
our production in certain locations. Our information technol-     world. We recognize there are excellent growth opportunities       our customers and consumers and continuing to improve our
ogy staff continued the SAP rollout to help us achieve more       in technical apparel and footwear, where Arc’teryx, Salomon        business and its value. I am proud to say that Amer Sports is
transparency.                                                     and Bonfire provide us with strong footholds to build upon. The     powered by its people, and I want to thank them for their com-
   It goes without saying that all of these changes are neces-    opportunity to more prominently enter these higher-growth          mitment.
sary as we continue to grow.                                      and higher-margin categories will be seriously explored.              I am convinced that we will be stronger than ever in the
                                                                     Amer Sports has a stronger-than-ever position in the global     future. Everyone involved with Amer Sports will participate in
STRENGTHENING OUR POSITION                                        sports business. We will continue to build strong business         our success. Our commitment to excel and our love of sports
In 2006, we achieved organic growth of 4%. Precor was up 9%,      platforms that serve all of our brands. International distribu-    will continue be our driver.
and Suunto was back on the growth path with a 13% increase        tion, efficient supply chain management, transparent informa-
in sales. Salomon’s sales increased 6%. Wilson’s sales re-        tion flow, and ambitious target-setting are all factors that will
mained at 2005 levels with 4% growth in Racquet Sports and        drive our company’s future success.


                                                                                                                                                                                                        5
    VISION, MISSION   VISION
    AND VALUES
                      To be the industry’s leading active sports company, fueled by
                      authentic brands with products that inspire athletic performance.




6
MISSION                                                         VALUES
Our mission is to produce sports and fitness products that       The Amer Sports staff consists of people of various nationali-     TEAM SPIRIT
enable everyone from the enthusiastic beginner to the profes-   ties with different business cultures. Our shared values sup-      We believe in team spirit and teamwork. We want our team to
sional athlete to achieve the best results and most enjoyment   port and guide our operations around the world. Success in         consist of strong individuals who support our common goals.
from their sports.                                              competition requires the determination to win, team spirit, fair
                                                                play and innovation.                                               FAIR PLAY
OUR PLAYING FIELD                                                                                                                  We play by the rules and we recognize and seek to remedy our
We are dedicated to active lifestyles, sports and wellness.     DETERMINED TO WIN                                                  faults.
                                                                Strong performance is our core value. Financial success
OUR AMBITION                                                    enables continuous development of our brands and products.         INNOVATION
The passion for sports is at the core of our business. Our      The determination to win encourages a strong work ethic and        The prerequisite for development is innovation, and the prime
primary motive is setting and achieving targets and moving      high-level performance.                                            mover for innovation is to always question the way we do
beyond our limits in life, business and technology, enabling                                                                       things.
people to achieve their highest goals in sports and improve
their well-being.



                                                                                                                                                                                                   7
    SPORTING GOODS,   The spirit of surpassing goals is at the core of the Amer Sports business.
                      We produce sports equipment for everyone from the professional athlete
    A BUSINESS        to the active participant to the enthusiastic beginner.
    OF THE FUTURE
                      Whether you are competing against others or just trying to    AMER SPORTS IS DEDICATED TO SPORTS
                      improve on your previous best; working out every morning      Amer Sports is dedicated to supporting and encouraging active
                      or playing golf on Saturdays with your best friend; or just   lifestyles, sports and wellness. We believe that the right equip-
                      hitting the slopes with your family on the weekend, we have   ment is the key to making sports and physical exercise more
                      a product that will improve your performance and make your    fun, enjoyable and effective. We provide athletes at every level
                      experience richer.                                            with the tools they need to get the most from every sport they
                                                                                    perform.




8
HIGHER STANDARDS OF LIVING                                            AGING POPULATION                                                     Supported by trends evident in today’s society, the sporting
Increased standards of living and rising levels of discretionary      Trends indicate that as we live longer than previous genera-       goods industry will continue to grow at a healthy pace. The
income in many parts of the world are leading people to spend         tions, we have more time and money to pursue our personal          continuous development of new and better products will keep
more on what they enjoy most, and many of them enjoy sports.          interests. As people live to be older, they are also living        Amer Sports and our brands at the cutting edge of the sports
The experiential nature of many sports provides participants          “younger” and staying active longer.                               equipment industry for years to come.
with intense physical action combined with the adrenaline
rush they seek. Sports is not only an activity, it is also a source   WELLNESS AND HEALTH
of entertainment for those participating and those watching.          Amer Sports and its employees are committed to helping
                                                                      people of all ages achieve the physical and mental well-being
LEISURE TIME                                                          they desire. Sports and fitness are undisputedly excellent ways
The demands of peoples’ careers are counter-balanced by               for people to take control of their own health and of their bod-
a significant focus on their leisure-time activities. At Amer          ies. We produce products that provide athletic enjoyment from
Sports, we understand that our consumers demand perfor-               childhood to retirement.
mance from their sports equipment. When you only have so
much time to spend, you want to achieve maximum satisfac-
tion from everything you do. Our products – footwear, apparel,
and equipment – are designed to do just that.




                                                                                                                                                                                                          9
     STRATEGY   We are the No. 1 sports equipment company in the world. Our goal is
                to further strengthen our position through a consumer-focused product
                strategy, strong brands, innovative research and product development,
                first-class customer service, and an efficient supply chain.


                Our strategy is based on sports, leisure-time activities and          The consolidation of the sporting goods industry continues.
                well-being. Rising standards of living, the greater leisure-time   Our ambition is to make the Amer Sports product portfolio
                people now enjoy, and growing awareness of the importance of       stronger and improve our strategic position by acquiring
                physical and mental health open up future growth potential for     companies that fit within our chosen business strategy and
                the sports equipment industry.                                     strengthen our company as a whole.
                  In addition to profitable organic growth, we are focused on
                finding and effectively harnessing synergy benefits as well as       GLOBAL BRANDS
                cooperation within our Group.                                      Our operations are based on strong global brands. Our major
                                                                                   brands are Salomon, Wilson, Precor, Atomic and Suunto.




10
BALANCED SPORTS PORTFOLIO                                         technologically-advanced game improvement products that            categories and market segments. Our comprehensive sales
Amer Sports provides equipment and products for a large           meet consumer needs. The expertise and experience of top           and distribution network enables us to bring new products to
variety of sports – winter and summer; indoor and outdoor;        athletes are the cornerstone of our product development.           market simultaneously world-wide.
individual and team; covering the core sports of the industry.    Collaboration with raw material suppliers also generates new          We continuously develop our operations in collaboration
  Our broad portfolio of sports makes us a year-round, full-      types of solutions for our sports equipment.                       with our partners. We offer the right products and services to
service supplier, making it easier for us to establish lasting                                                                       ensure optimal efficiency in the sell-through of products from
business relationships within the industry. Moreover, our wide    CUSTOMER SERVICE AND SUPPLY CHAIN MANAGEMENT                       retail to the consumer. Our experts serve the whole spectrum
range of sports and global presence across all markets bal-       Our company-wide sales, logistics, Asian sourcing and IT           of sports retailers, from specialist stores to large chains.
ance the Amer Sports business as the seasons turn and the         functions help us operate cost-effectively. We are focused on         Effective supply chain management also enables us to boost
popularity of individual sports fluctuate.                         using our collective know-how to bolster our shared plat-          profitability and improve working capital efficiency.
                                                                  forms, deepen our understanding of consumer purchasing
GAME IMPROVEMENT PRODUCTS                                         behavior, and improve our product development and innova-
We are specialists in all of our selected sports. We design and   tion processes.
manufacture the industry’s best products. Successful R&D is          Our portfolio of brands is supported by a strong supply chain
an important part of our business. We continuously roll out       that guarantees our customers first-rate service in all product




                                                                                                                                                                                                      11
     FINANCIAL TARGETS                                                  Our goal is consistent profitable growth. Profitability enables us to invest
                                                                        in product development and marketing, which are essential tools in bolstering
                                                                        our position as the global leader in the sports equipment industry.


     In our day-to-day operations, our primary focus is to achieve      AVERAGE ORGANIC GROWTH OF 5% PER ANNUM                               OPTIMAL BALANCE SHEET STRUCTURE
     organic growth through the development of innovative prod-         Our objective is to deliver currency-neutral organic growth          We will use our balance sheet actively whilst avoiding exces-
     ucts, effective marketing, solid customer service, and an          averaging 5% per annum and to outgrow our competitors in             sively large financial risks.
     efficient supply chain. In addition, we will continue to be an      the competitive field.
     active participant in the structural changes taking place within                                                                        DIVIDEND PAYOUT RATIO EQUIVALENT
     the industry.                                                      EBIT OF AT LEAST 10% OF NET SALES                                    TO AT LEAST 1/3 OF ANNUAL NET RESULT
        We intend to make selective acquisitions that support the       Our annual target is to achieve EBIT of at least 10% of net          We seek to be viewed as a competitive investment that in-
     Amer Sports strategy, strengthen our position, and deliver         sales. In addition, our profitability should be better than that of   creases shareholder value through a combination of dividend
     shareholder value.                                                 other leading sports equipment companies world-wide.                 payments and share price performance. We pursue a progres-
                                                                                                                                             sive dividend policy reflecting our earnings performance, with
                                                                                                                                             the aim of distributing a dividend of at least one-third of our
                                                                                                                                             annual net result.


12
 ORGANIC GROWTH, %                     EBIT, %                            GEARING, %                          DIVIDEND RATIO, %


                 7     7*                                                                   112                                               51***
                                       10.5   10.8                                                105          48                     48
5%                               10%                  9.7                                                              42      43
                            4
     2
                                                            6.8**   6.7                                 33%


                                                                           47
                                                                                33     29

          –4
     02   03    04     05   06          02     03     04    05      06     02   03     04   05    06
                                                                                                               02      03     04      05      06


 * Excluding Salomon                   ** Pro forma                                                           *** Board of Directors’ proposal.




                                                                                                                                                      13
     STRONG GLOBAL BRANDS                                                 The Amer Sports business is based on strong brands that are respected
                                                                          by athletes world-wide. Our major brands are Salomon, Wilson, Precor,
                                                                          Atomic and Suunto.


     We continue to develop our brands as global power brands             FOUR CORNERSTONES                                                 INDUSTRY LEADERS
     within their respective sports territories. We carefully define       All of the Amer Sports brands stand on four cornerstones:         Internationally, Amer Sports has several strong brands that are
     and build our brands. By adopting a focused brand strategy,          authenticity, authority, attitude and aesthetics. Authenticity    linked by their long histories in the sports equipment industry.
     we create and manage consistent brand experiences across all         and authority are at the core of everything we do. Absolute          Wilson’s roots are in Chicago, USA. At the heart of ball
     segments and product categories.                                     expertise in each of our sports gives us authority. Marketing     sports history for almost a century, no other company has been
       Our brands are trusted by consumers world-wide. We earn            and communications are tasked with conveying attitude to          as influential in shaping the games of tennis, golf, baseball,
     their trust by setting the standard of innovation and usability in   the brands and ensuring that their cores remain strong. The       and American football as Wilson. As the originators of break-
     every sport we participate in. We offer advanced, performance-       significance of aesthetics is growing as demanding consumers       through technologies, Wilson has world-wide legitimacy and
     oriented products with attention to detail, high quality and         require successful brands to not only be functional in terms of   has produced legendary classics in each sport it plays in.
     functional dependability. We are genuinely passionate about          form but also feature design that follows current trends.            Atomic comes from the Austrian village of Altenmarkt, which
     shaping and growing our sports by continuously developing                                                                              is surrounded by mountains. The company has focused on
     products that elevate the performance of leading athletes as                                                                           snow sports equipment since 1955. Nowadays, Atomic is the
     well as active participants.                                                                                                           world’s leading manufacturer of alpine skis.

14
  Precor’s home is on the west coast of the United States,          company is particularly known for its road racing and mountain     and the WTA Tour. Wilson is also the official equipment service
where the fitness concept was born. For over 20 years, Precor        bike wheels and rims.                                              partner for many badminton championships.
has focused on manufacturing high-quality, technically-ad-                                                                                Mavic has been the official service partner of the Tour de
vanced fitness equipment. When Precor brought the world’s            ATHLETE ENDORSEMENT AND EVENT PRESENCE                             France since 1973, assisting all of the participating teams. In
first elliptical crosstrainer to market in 1995, it revolutionized   A form of expression that solidifies the authenticity of our        road racing, the company has been an official supplier to many
aerobic exercise in fitness centers world-wide.                      brands is that they all have a superior understanding of each of   clubs and teams and a partner to several top teams on the Pro
  Through 70 years of innovation, Suunto has become the             their sports. Our brands create genuine and long-lasting rela-     Tour. Mavic also has a strong presence in the newest forms of
world’s market leader in diving computers and outdoor instru-       tionships with top athletes, coaches and sports organizations.     cycling: mountain biking, BMX and triathlon.
ments. Suunto represents the pinnacle of Finnish design and            Wilson has been the Official Ball of American Football’s            Atomic has a prominent place in various forms of skiing, in-
high-tech expertise. Suunto has also recently entered the           professional league, the NFL (National Football League),           cluding alpine and cross-country skiing and ski jumping. Since
growing fitness training market with its t-series product line.      since 1941. Every Super Bowl has been played using a Wilson        1995/96, Atomic skiers have captured 11 straight overall men’s
  Salomon was established in 1947. It has evolved into a global     football. At the collegiate level, Wilson is the official ball of   alpine skiing world cup titles.
performance brand delivering design and innovation to the           American Football and the Official Basketball of the NCAA              The Suunto Ambassador Program consists of international
mountain. Salomon has a passion to grow and always has its          (National Collegiate Athletic Association) Men’s and Women’s       top athletes and coaches who utilize Suunto’s various products
eye on the future of sport, ready to challenge established ideas.   National Championships. Wilson is also the Official Ball of the     in sports activities.
  Driven by innovation, Arc’teryx was founded in 1991 to build      CFL (Canadian Football League), and the Official Ball Glove of         Salomon is visibly active in many mountain sports, such as al-
better gear. It radically challenges the market’s status quo.       MLB, (Major League Baseball), the U.S. professional baseball       pine and cross-country skiing, snowboarding, and trail running.
Arc’teryx products are the most innovative and superbly crafted     league.                                                            Salomon has also devoted great efforts to creating new disci-
packs, harnesses and mountain apparel pieces available.                The world’s best tennis players, including world No. 1’s        plines, including the Crossmax ski series and Adventure Racing.
  The oldest of our brands is bicycle component manufacturer        Roger Federer and Justine Henin, use Wilson rackets. Wilson
Mavic, whose history reaches back to the end of the 1800’s.The      is the official ball of the U.S. Open, Australian Open, Davis Cup

                                                                                                                                                                                                           15
Janica Kostelic,                      Tom Brady,                                                           Marlies Schild, Atomic
                                                                    Benjamin Raich, Atomic
Salomon                               Wilson




                             OUR
                             PRODUCTS IN                          David Wright, Wilson
                                                                                              1 Venus Wlliams, Wilson
                                                                                                                  Jonathan Wyatt, Suunto



                             ACTION
                                                                                                                                               Daniel Tynell, Salomon




 David Benedek, Salomon
                                                                               Roger Federer. Wilson
                                           Anja Pärson, Salomon
Padraig Harrington, Wilson




   16

                                                                                                                                    Simon Booth, Salomon
   David Moncoutie, Mavic        Tobias Angerer, Atomic                                  Richie Schley, Mavic              Kerri Walsh, Wilson




                                                                                      Simon Dumont, Salomon

                                                      Nick Sharp, Salomon                                                                         Bob and Mike Bryan, Wilson
                                                                                                                                      1 Venus Wlliams, Wilson




         Julien Absalon, Mavic

                                           Rob Jebb, Salomon

                                                                                                   Martina Eberl, Wilson

                                                               Andrea Brede, Suunto

                                                                                                                                 Cat Osterman, Wilson

                                                                                                                                 Justine Henin, Wilson




                                                                                                                                                                               17

Anthony Wall, Wilson
18
                                                                                                                                                                          SALOMON PAGES 18–25
Salomon consists of authentic and respected outdoor and winter sports
brands. The most well-known are Salomon in winter sports equipment,
outdoor footwear and apparel; Arc’teryx in outdoor apparel; and Mavic
in cycling. The Salomon business is structured into three business
areas: Winter Sports Equipment, Apparel and Footwear, and Mavic.




Salomon was born in 1947 in the heart of the French Alps, the     fourth quarter. The delay was caused by Salomon’s logistics
birthplace of modern alpinism. Driven by a passion for skiing     partner not being able to deliver all the winter sports equip-
and design innovation, Francois Salomon and his son Georges       ment to market on schedule.
designed and perfected many of the first modern ski bindings.        Despite the delivery issues, Salomon reached its goals for
During the following 60 years, Salomon’s commitment to inno-      2006, supported by improved profitability in Winter Sports
vative design and passion for mountain sports created a vast      Equipment and strong growth in soft goods. Mavic’s result                     JEAN-LUC DIARD, President of Salomon
range of revolutionary innovations in bindings, boots, skis and   declined but remained solid.
                                                                                                                                                “Salomon is actively involved in nearly every element
apparel for both alpine and cross-country skiing. The company                                                                                   of action and outdoor sports. Nature and the out-
also brought innovative solutions to footwear, apparel and        Sales and EBIT                                                                doors are key to all of our sports. But maybe what
equipment for snowboarding, adventure racing, mountaineer-        For Salomon, the fastest growth was seen in emerging mar-                     we are most proud of is our capacity to innovate in
ing, and many other sports. In 1999 Salomon extended its          kets, especially in Russia. Eastern Europe, Scandinavia and                   every field we enter.”
terrain to cycling by acquiring Mavic, and in 2002 it bought      German-speaking Europe had healthy growth ratios, while
Arc’teryx to complement its presence in the outdoor apparel       Latin Europe and the Far East underperformed.
and gear market.                                                     Salomon’s net sales increased 6% to 661.4 million euros.
   Headquartered in Annecy, France, Salomon employed 2,372        The breakdown of net sales was as follows: Winter Sports
people at the end of 2006. Its sales network within the Amer      Equipment, 52%, Apparel and Footwear, 32%, and Mavic,               YEAR 2007
Sports organization serves customers in approximately 80          16%. Of net sales, the Americas generated 24%, EMEA 65%             Salomon continues to be on track with the turnaround program
countries.                                                        and Asia Pacific 11%. Sales were up 6% in the Americas, 7%           initiated in 2005. It is expected to yield substantial earnings
                                                                  in EMEA and 3% in Asia Pacific. Winter Sports Equipment              improvements in 2007 and 2008. Industrial cooperation with
YEAR 2006                                                         suffered from delivery problems in September–October. The           Atomic should provide cost savings in Winter Sports Equipment.
The year 2006 was one of significant changes for Salomon. The      situation was back to normal by the end of the year.                   As the year began, temperatures remained higher than
company completed a restructuring program in France, and as          Salomon’s EBIT came in at 23.6 million euros (18.1).             usual in Europe, Asia and the Eastern United States. The
a result its personnel will be reduced by 370 people. Decisions   Healthy sales growth and improved cost control contributed          market for winter sports equipment is expected to fall short of
were also taken to lower product costs and create industrial      to the improvement in earnings over 2005 figures. Salomon’s          the 2005/06 season both in terms of volume and value due to
synergies with Atomic. The integration of Salomon’s sales         deliveries of winter sports equipment and apparel largely take      uncertainty caused by uncommon weather during the 2006/07
organization into the Amer Sports global sales and distribution   place in the latter half of the year. The busiest delivery period   winter season.
team is proceeding as planned.                                    is September–November, emphasizing the seasonality of its               Based on pre-orders for spring/summer 2007, Footwear
   In 2006, a portion of Salomon’s deliveries slated for          business operations.                                                and Apparel will continue its high growth rate. Mavic’s solid
September was delayed, rolling over from the third to the                                                                             growth and profitability is expected to continue.


                                                                                                                                                                                                        19
     Salomon is the world’s largest winter sports equipment brand
     in the world, including the sports of alpine skiing, cross-country skiing
     and snowboarding.

     The Salomon Winter Sports Equipment business is             Equipment remained at 2005 levels. The fastest-growing
     directed from Annecy, France.                               product category was cross-country skiing with a sales
                                                                 increase of 19%. Snowboard equipment sales were on
     YEAR 2006                                                   level with the previous year, while alpine skiing sales
     The global winter sports market is estimated to be          declined 5%.
     approximately 1.9 billion euros, divided into 1.3 billion      Salomon is the world’s largest winter sports equip-
     euros in alpine sports, 0.4 billion in snowboarding, and    ment brand in the world and holds the leading position
     0.2 billion euros in cross-country skiing. Due to excel-
     lent winter conditions in 2005/06, pre-order deliveries
     for 2006/07 were solid.
                                                                 for alpine boots, cross-country boots and bindings.
                                                                 A total of 1.3 million pairs of Salomon alpine boots were
                                                                 sold in 2006.                                                 Salomon’s cr
                                                                                                                                                   MARCH
                                                                                                                                             oss-country sk
       The start of the 2006/07 season was uneven, with             Salomon’s strong position in the growing cross-            loppet finish lin            iing team celeb
                                                                                                                                                e as Sweden’s               rated at the Va
                                                                                                                              only Salomon                    Daniel Tynell,               sa-
     good snow conditions in western parts of North America      country market continued. The third year in cross-                          equipment, wo                   who skied us
                                                                                                                              the race, Tyne                n this classic                 ing
                                                                                                                                            ll used Salom                  ski marathon.
     but unusually warm weather in Europe.                       country skis established Salomon as one of the key          Classic boots,               on’s Equipe 10                  For
                                                                                                                                             and SNS® Pilot®             Classic skis, S-
                                                                                                                             launched last                    Classic bindin              Lab
                                                                 brands in the market.                                                      spring.                           gs, which were
     Sales
     Salomon Winter Sports Equipment was successful in           Achievements
     reversing its long-term declining trend in sales. Despite   Salomon’s cross-country skiing team celebrated at the
     lower than usual re-order levels, which were due to         finish line of the 2006 Vasaloppet as Sweden’s Daniel
     unfavorable weather conditions, sales of Winter Sports      Tynell, who skied using only Salomon equipment, won

20
           HOT PRODUCTS
                                                            the classic ski marathon. For the race, Tynell used                  GLOBAL MARKETS
                                                                                                                                 (WHOLESALE)*
                                                            Salomon’s Equipe 10 Classic skis and the S-Lab Classic
                                                            boots and SNS® Pilot® Classic bindings.                              ALPINE SKI EQUIPMENT                            EUR 1.3 BILLION



Impact Alpine Boot                                             Salomon introduced a new breed of bindings and
                                                            boots for cross-country skiing. The SNS Pilot Classic
                                                            features a two-axis binding system. The major benefits
                                                                                                                                 CROSS-COUNTRY SKI EQUIPMENT

                                                                                                                                 SNOWBOARDS
                                                                                                                                                                                 EUR 0.2 BILLION

                                                                                                                                                                                 EUR 0.4 BILLION

                                                                                                                                 * Converted into euro at average exchange rates over the
The Impact 10 will challenge the
                                                            of the SNS Pilot Classic are better control and more                   review year
strongest of skiers on the quest for
the best: Advanced Shell Technol-                           power transmission in the kick phase. What’s more, this              GLOBAL MARKETS 2006 (2005)
ogy fully loaded with a 110 flex,                            is the lightest boot and binding system on the market.
100mm last and perfect envelop-                                                                                                  EUROPE                                                 63% (62)
                                                            Atomic’s cross-country bindings and boots will also be
ment with revolutionary articulated                         manufactured in compliance with the SNS system.                      NORTH AMERICA                                          24% (25)
buckles that spread pressure                                                                                                     JAPAN                                                  11% (11)
                                                               The Salomon X-Wing range achieved great success
across the instep. The fully cus-                                                                                                OTHER                                                    2% (2)
tomizable liner provides precision
                                                            in 2006 with rave reviews in magazine tests, with Best
and comfort.                                                in Test ratings from all the major ski magazines. The
                                                                                                                                 SALOMON MARKET SHARES 2006 (2005)
                                                            X-Wing range carves on groomers and floats on pow-
                                                            der, meeting the needs of all versatile skiers. In 2007,             ALPINE SKIS                                            13% (14)

                                                            Salomon is reinforcing this line with new technologies,              BINDINGS                                               17% (18)

                                                            such as the Protrak system and full wood cores, to take              SKI BOOTS                                              24% (26)

                                                            All-Mountain versatility to a new level.                             CROSS-COUNTRY SKI EQUIPMENT                            26% (23)

                                                               Salomon women achieved success at the 2006 Olym-                  SNOWBOARDS                                             11% (12)

                                                            pic Games: Janica Kostelic was the Combined Olympic
Aero Ski                                                    Champion and a silver medalist in Super-G, and Anja
                                                            Pärson was the Slalom Olympic Champion and bronze                    PARTICIPATION, SKIER DAYS
                                                                                                                                 IN FRANCE
                                                                                                                                                                                      WINTER SPORTS
                                                                                                                                                                                      EQUIPMENT NET SALES,
Aero is the summit of Salomon’s technology today,
                                                            medalist in downhill and combined.                                                                                        EUR MILLION
providing radical performance with complete techni-
cal assistance to ensure Control on Demand. A unique                                                                        Million
combination of aerodynamic technology and Salomon’s         YEAR 2007                                                       60                                                          349    346
expertise brings a new approach for the performance and     The focus in 2007 continues to be in improving the
                                                                                                                            55
carving segment. Our goal is to make carving skis more      profitability of the Winter Sports Equipment business.
accessible by adding Hybrid Technology and Multiradius      Industrial synergies will start to materialize in product       50
construction so you can control every situation.            concepts through lower production costs and improved
                                                                                                                            45
                                                            processes. Synergies are also gained through shared
                                                            components with Atomic.                                         40

                                                                                                                                                                                        05     06
                                                                                                                            35




                                                                                                                                     1


                                                                                                                                             2

                                                                                                                                                     3


                                                                                                                                                             4

                                                                                                                                                                     5

                                                                                                                                                                             6
                                                                                                                                  /0


                                                                                                                                          /0

                                                                                                                                                  /0


                                                                                                                                                          /0

                                                                                                                                                                  /0

                                                                                                                                                                          /0
                                                                                                                                 00


                                                                                                                                         01

                                                                                                                                                 02


                                                                                                                                                         03

                                                                                                                                                                 04

                                                                                                                                                                         05
                                                            WINTER SPORTS EQUIPMENT          WINTER SPORTS EQUIPMENT             Source: Syndicat National des Telepheriques
                                                            NET SALES                        NET SALES                           de France - Winter 2005/2006


SNS Classic                                                 1 EMEA 67%
                                                            2 AMERICAS 20%
                                                            3 ASIA PACIFIC 13%
                                                                                             1
                                                                                             2
                                                                                             3
                                                                                                 ALPINE SKI EQUIPMENT 65%
                                                                                                 CROSS-COUNTRY 17%
                                                                                                 SNOWBOARDING 12%



Nordic System
                                                                                             4   OTHER 6%


                                                                                                            4
                                                                     3
                                                                                                        3
The revolutionary SNS Pilot Classic binding is now
available. The two-axis system with a steel link provides       2
                                                                                                    2
more control, thus more pleasure. With an automatic
                                                                             1                                   1
step-in and pole or manual step-out, this binding is
unbelievably easy to use.


                                                                                                                                                                                                             21
     Salomon Apparel and Footwear includes technical apparel and
     footwear for outdoor performance, trail running and other outdoor
     categories. The apparel business is carried out through three authentic
     brands: Salomon, Arc’teryx and Bonfire.



     The Salomon Apparel and Footwear business is directed     Sales
     from Annecy, France.                                      Net sales of Apparel and Footwear grew by 18% to 208.0
                                                               million euros. The positive trend in sales of outdoor
     YEAR 2006                                                 footwear was boosted by new softshell technology. The
     The market for outdoor apparel and gear is very frag-     growth was strongest in apparel, where Arc’teryx- and
     mented, with few truly global brands. The estimated       Salomon-branded products grew fastest.
     market size is 10 billion euros, divided almost equally      Salomon has established itself as the specialist in the
     between footwear and apparel and gear. The outdoor
     apparel and gear market has continued to outperform
                                                               fast-growing trail running category in addition to its clas-
                                                               sical stronghold in the outdoor performance segment.
                                                                                                                              JUNE–SEPTEMBER
     other soft goods categories, supported by the trend       A total of 2.6 million pairs of Salomon shoes were              The Adrenaline Hunte
                                                                                                                                                      rs are a team of glo
                                                                                                                               athletes who travel                         be-trotting
     towards healthier lifestyles.                             shipped in 2006.                                                                    around the planet loo
                                                                                                                               next hit of pure adr                       king for the
                                                                                                                                                    enaline. This past
                                                                                                                              Adrenaline Hunters´                       summer the
                                                                                                                                                     most outrageous foo
                                                                                                                              shown at Europe’s bes                         tage was
                                                                                                                                                     t Outdoor Sports Eve
                                                                                                                              Saab Salomon Adr                             nts, as the
                                                                                                                                                  enaline Tour cruise
                                                                                                                              continent in a custom                   d around the
                                                                                                                                                    truck with a gigantic
                                                                                                                                                                          screen.

22
          HOT PRODUCTS
                                                              Arc’teryx´s continued success is based on radically         APPAREL AND FOOTWEAR     APPAREL AND FOOTWEAR
                                                                                                                          NET SALES, EUR MILLION   NET SALES
                                                            improving the lightest, best-performing, and highest-
          Aspen Shoe                                        quality outdoor products available. It has a reputation of
                                                            being at the pinnacle of the outdoor world. Its original                208
                                                                                                                                                   1 EMEA 62%
                                                                                                                                                   2 AMERICAS 32%
                                                                                                                                                   3 ASIA PACIFIC 6%

          Salomon Aspen Aerogels™ technology pro-           design is fused with proprietary construction processes       176
          vides superior warmth and less bulk in this
                                                            and unrivalled craftsmanship to create the best outdoor
          lightweight, extreme-cold boot. The Aspen                                                                                                         3

          features a full waterproof booty and seam-        gear made.
          sealed construction for superior protection                                                                                                 2

          against snow and ground water. The ultimate       Achievements
                                                                                                                                                                   1
           in climate control technology is achieved by     Salomon´s softshell footwear received the Outdoor
              an upper that combines a furry lining with    industry award in 2006 and the “l’Escarpin de Cristal          05       06
                     quilted insulation. The lightweight
                                                            2006“ award for its technology innovation.
                      synthetic 3D Belt protects the boot
                                                               As a consequence of the purchase of Salomon by
                      and allows for easy entry/removal.
                                                            Amer Sports, the footwear and apparel business area
                                                            is working intensively to take responsibility for its Asian
                                                                                                                          APPAREL AND FOOTWEAR     APPAREL AND FOOTWEAR
                                                            sourcing operations. Changes for footwear will be             NET SALES                NET SALES
                                                            completed in the spring 2007 and for apparel and gear         1 SALOMON 67%            1 APPAREL AND GEAR 53%


Aero 3:1 Jacket
                                                                                                                          2 ARC’TERYX 26%          2 FOOTWEAR 47%
                                                            in 2008. The changes also enable us to simplify our           3 BONFIRE 7%
                                                            product development processes.
Salomon’s new 3-in-1 jacket featuring
a 100% seam-sealed, Advantex Move                           YEAR 2007
                                                                                                                                     3
DWR outer shell and integrated Recco                        The apparel and footwear area will strive to continue its
avalanche rescue system technology.                         solid growth in 2007, supported by innovative design and            2
                                                                                                                                                      2
Embossed padding on the forearm,                            the further strengthening of its distribution network.                                                     1

shoulders and elbows as well as                             The challenge of taking over the supply network has                             1
contrasting, stitchless, water-
                                                            proceeded well, and 2007 is the year when most of the
proof zippers provide progressive
styling. A zip-in softshell inner                           changes will materialize.
with removable back padding
provides maximum motion and
fit. The wide waist strap and
comfy stretch side-panels hold
back padding close to the body.




Fusion Dry Shoe
Weatherproof outdoor luxury from
Salomon: a waterproof version of
the innovative softshell Fusion/
Symbio. Outdoor luxury gets an
upgrade – waterproof techno-
logy is added to this incredibly
innovative softshell shoe.
A Contagrip® running last provides agility and
security while the super-tech internal Sensifit™
support system ensures security and support.
3D Fit padding provides incredible fit comfort.

                                                                                                                                                                            23
     Mavic is a leading cycling systems brand. Its territory covers road cycling,
     mountain biking, triathlon and track racing. Mavic is all about love of
     cycling, which leads to the designing and manufacturing of great products
     that offer cyclists a real difference.



     Mavic is based in Annecy, France and employed world-
     wide 360 people at the end of 2006. Mavic was founded       Mission
     by Charles Idoux and Lucien Chanel in Lyon in 1889.         Mavic’s mission is to provide systems and equipment for
     Today, the company is most noted as a manufacturer          cyclists from novice enthusiasts to professional riders,
     of premium cycling wheels. Mavic’s product line has         helping them accomplish their most ambitious objec-
     always been focused on consumers and their needs            tives and experience the thrills of cycling.
     because its spirit and passion lives “at the heart of cy-
     cling”: from the Pro Tour teams to weekend enthusiasts
     on the road side, from World Cup athletes to every-day
                                                                 YEAR 2006
                                                                 The road and mountain bicycles market is formed of
                                                                                                                             Mavic is the officia
                                                                                                                                                 JULY
     mountain bikers in the off-road domain. In this spirit,     a limited number of specialized component manufac-                                l service partner of
                                                                                                                             France, but it has als                       the Tour de
     Mavic formulated its current philosophy of “The best        turers. The estimated size of the sporting bike compo-                               o become the Tour’s
                                                                                                                                                                             unofficial
                                                                                                                             mascot. The compan
                                                                                                                                                    y is as much a part of
     wheel for every ride.”                                      nent market was approximately 3 billion euros. The year    the Tour is of the Fre                         the Tour as
                                                                                                                                                  nch summer. Mavic
                                                                 2006 was somewhat impacted by high inventory levels of     to friends of Le Tou                        is also known
                                                                                                                                                  r world-wide becaus
                                                                                                                            Mavic service car pop                        e the yellow
                                                                 specialized bicycle distributors.                                                  s up on television scr
                                                                                                                                                                           eens every
                                                                                                                            day during the race.



24
           HOT PRODUCTS
                                                                                                                          MAVIC NET SALES



Cosmic Carbone                                                Sales                                                       EUR MILLION

                                                              Mavic’s net sales increased 9% to 107.8 million euros.               108
                                                              The fastest growth was seen in OEM sales, where Mavic           99


SL Premium                                                    provides wheels to a number of the best-known bicycle
                                                              brands. Although relatively small as a product group,
               A wheel that performs as well as it looks      the cycling apparel and footwear lines were also a clear
                good, the Cosmic Carbone SL Premium
                                                              success.
                 will improve even the most elegant of
                  bikes. For years, the Cosmic Carbone
                                                                 In order to further improve its responsiveness to the
                  SL has been the racer’s preference:         market and contribute to working capital targets, Mavic         05   06
                  one of the most aerodynamic wheels of       initiated lean product development and manufacturing
                  the peloton, one of the stiffest, and yet   projects with goals to dramatically reduce lead times.
                  light enough to help the racer be the       The first positive results were already visible by the end
                first to cross the finish line. The Cosmic      of 2006.
               Carbone SL Premium integrates the same                                                                     MAVIC                MAVIC
exceptional technical features and dynamic abilities, as                                                                  NET SALES            NET SALES
the Cosmic Carbone SL, but packaged in an exclusive           Achievements                                                1 EMEA 65%           1 RIMS AND WHEELS 87%
way: titanium parts (axle, skewers) and discreet and classy   In July, Mavic signed a new five-year extension agree-       2 AMERICAS 19%       2 APPAREL AND FOOTWEAR 11%
                                                                                                                          3 ASIA PACIFIC 16%   3 OTHER 2%
aesthetics to outfit the most beautiful bike out there.        ment with the Tour de France to continue as the official
                                                              service partner of the world’s most famous cycling event.                                 3




      Wintech HR
                                                                 During the Tour de France, Mavic tested a new proto-          3                    2

                                                              type that will be used to gather practical user experi-
                                                              ences with the help of professional riders. The prototype   2
       The WinTech line of computers takes a large leap       marks a new step forward in technology. There are no                       1
       forward this year. New designs and a host of fea-                                                                                                    1
                                                              holes whatsoever in the wheel rim: the treads, center
       tures and add-on options that offer real reliability
        are in the line-up for 2007, including a new multi-   and rim form one carbon fiber whole.
        position, digitally coded, wireless cycle computer       The Ksyrium ES, Mavic’s newest wheelset, has been
         with heart rate monitor functions. In addition to    designed for top-level competition cycling. The combi-
         speed and distance information, it offers all the    nation of Maxtal aluminum, carbon fiber and titanium
         heart rate monitor functions that are useful in      has produced especially lightweight and responsive
          cycling. All of the advantages that have made       wheels.
          WinTech a success are of course included: easy
                                                                 At the end of August, Julien Absalon, a 26-year-old
          installation, set-up and ease of use.
                                                              Frenchman, dominated in New Zealand to win his
                                                              third consecutive Cross Country World Championship.

Crossmax SLR                                                  Absalon rode on a bike with Mavic’s new Crossmax SLR
                                                              wheels. He also captured Olympic gold in Athens in
Take the same incredible techni-                              2004.
cal specs as the Crossmax SL, add
titanium quick release and a carbon                           YEAR 2007
front hub to make it even lighter,                            The outlook for Mavic in 2007 is favorable. With a strong
plus racing graphics, and you get                             product offering and well-functioning operations, it
the Crossmax SLR, the world’s best-
                                                              should be able to continue to achieve growth rates that
performing cross-country race wheel.
                                                              exceed the cycling industry average.
The wheel is 150g lighter for efficiency in
steep climbs and 10% stiffer to reduce energy loss and
provide more speed from power input. The wheel has 9%
less inertia during fast accelerations and off-turn speed
and shorter braking distances, and it features shorter
spokes and Isopulse rear lacing to reduce tension cycles,
balance spokes tensions from side to side, reduce mate-
rial fatigue, leading to improved wheel endurance.                                                                                                                          25
26
                                                                                                                                                                           WILSON PAGES 26–33
Wilson is the world’s leading manufacturer of ball sports equipment.
Its core sports are tennis, baseball, American football, golf, basketball,
softball, badminton and squash. The Wilson business is structured into
three business areas: Racquet Sports, Team Sports and Golf.




                                                                                                                                         CHRIS CONSIDINE, President of Wilson
At the heart of sports history for almost a century, no other          Wilson’s EBIT increased 5% from last year’s level to 54.6
company has been as influential and intimately involved in           million euros.
                                                                                                                                         ”We really stand for the athlete. We help the average
shaping the games of tennis, golf, baseball and American               Racquet Sports continued to perform well, with net sales          player and the elite athlete play better. We take care
football as Wilson. As the originator of breakthrough tech-         rising 4%. Of its product groups, the strongest growth was           of their needs and our consumers’ needs. Amer
nologies, Wilson has produced legendary classics and earned         seen in footwear and accessories, up 16% and 14%, respec-            Sports is a collection of the finest sporting goods
world-wide legitimacy in each sport it participates in.             tively.                                                              companies in the world. We are proud to be a part of
  Headquartered in Chicago, in the United States, Wilson               Team Sports net sales increased 8%. Sales of all key prod-        the Amer Sports family.”

employed 1,919 people at the end of 2006. Its dedicated sales       uct groups were up compared with 2005, with sales decreasing
network within the Amer Sports organization serves custom-          only in uniforms and training equipment.
ers in over 100 countries.                                             Golf’s sales fell short of its objectives, especially in Japan.
                                                                    Demand for golf equipment also declined in Europe. Also the
Mission                                                             new distribution strategy focusing on major customers in the
In constant pursuit of innovative technologies and cutting-         United States cut into Golf’s net sales.
edge design, to develop breakthrough products that enhance
the performance of all athletes, from the enthusiastic novice       YEAR 2007
to the seasoned professional.                                       Wilson anticipates its profitable growth to continue in 2007.
                                                                    Market trends for Racquet Sports are expected to remain
Vision                                                              favorable. The business is expected to continue its growth
To be the No. 1 ball sports company in the world.                   through new innovative products and geographical expan-
                                                                    sion in emerging markets. Team Sports market trends are
Sports categories                                                   expected to remain stable, and its sales are expected to grow
Wilson’s core sports are tennis, baseball, American football,       in 2007. Golf’s profitability is expected to improve in 2007.
golf, basketball, softball, badminton and squash.

YEAR 2006
Wilson’s net sales of 569.6 million euros were flat compared
to 2005. The breakdown of net sales was as follows: Racquet
Sports, 41%, Team Sports, 39%, and Golf, 20%. Of net sales,
the Americas generated 67%, EMEA 19% and Asia Pacific 14%.
Sales growth was 2% in the Americas. In EMEA, sales were at
last year’s level. In Asia Pacific, sales were down 9%, especially
due to weaker sales of tennis and golf equipment in Japan.




                                                                                                                                                                                                  27
     Wilson is the world’s number one racquet sports company. Its sports
     categories include tennis, badminton and squash.

     The Wilson Racquet Sports business is directed from          groups, sales growth was seen particularly in footwear,
     Chicago, in the United States, and it employed 601           16% and accessories, 14%. The new Evolution footwear
     people at the end of 2006.                                   collection is the first line of tennis shoes to meet the
                                                                  specific needs of players as their game evolves.
     YEAR 2006                                                       In tennis balls, Wilson is the only manufacturer to
     For 2006, the global wholesale value of the two largest      have official ball status at two of the four Grand Slam
     tennis industry product categories (rackets and tennis       events: the Australian Open and the U.S. Open. These
     balls) is estimated at approximately 0.5 billion euros, of   partnerships highlight Wilson’s quality and performance
     which tennis rackets accounted for approximately 60%         in the tennis ball category.
     and tennis balls 40% of the market. The largest market
     by geographic region was Europe, which accounted for         Achievements
     approximately 34% of the total global market, followed       Solidifying a relationship that began at age 10, Roger
     by North America at 32% and Japan at 18%, with the           Federer signed a lifetime agreement with Wilson for
     rest of the world at 16%. Tennis participation world-wide
     continues to be very stable, with a strong core of serious
                                                                  rackets, string, tennis balls and tennis accessories.
                                                                  Ranked No. 1 in the world, Federer has competed with
                                                                                                                                                               JULY               won the Wim
                                                                                                                                                                                                  bledon crow
                                                                                                                                                                                                               n
     and active players.                                          Wilson rackets since day one, signing his first profes-                                      1 Ro  ger Federer                  th Gr and Slam
                                                                                                                                               d world No.            This was Fe
                                                                                                                                                                                    derer’s eigh
                                                                                                                                Top seed an           ecutive year.
                                                                                                                                                                                                        the sixth
                                                                  sional agreement with the company in 1997.                                                                             became only
                                                                                                                                for th  e fourth cons              ith the win, Federer                     er to
                                                                                                                                                th career title. W                            e eighth play
     Sales                                                          Federer won his third Tennis Masters Cup title in four       crown and 39                                   titles and th
                                                                                                                                                               ht Wimbledon                       is Club.
                                                                                                                                                re four straig                   nd Lawn Tenn
     Racquet Sports sales continued to grow positively, with      years in 2006. The world’s No. 1 men’s player earned an        man to secu                      the All-Engla
                                                                                                                                                    e crowns at
     net sales rising 4% to 235.3 million euros. Of the product   incredible 22–2 overall record at the circuit-ending finals.     wi n four or mor



28
            HOT PRODUCTS
                                                                  Justine Henin earned her first Sony Ericsson WTA                        WILSON MARKET SHARES 2006 (2005)

                                                                Tour Championship title in Madrid and ended the sea-

            nSix One Tour
                                                                                                                                         TENNIS RACKETS
                                                                son as the No. 1 women’s player in the world.                            GLOBAL                                       36% (37)
                                                                  Wilson signed an agreement to be the exclusive                         US                                           46% (46)
              One of Wilson’s most popular high                 worldwide distributor of Luxilon string. Luxilon offered                 EUROPE                                       33% (33)
              performance rackets, the nSix One Tour            on-site stringing services for all ATP Masters Cup and                   JAPAN                                        25% (27)
               is also the No. 1 racket choice of touring       Sony Ericsson WTA Tour players throughout the Cham-
                pros, including ten-time Grand Slam
                                                                pionships.                                                               WILSON MARKET SHARES 2006 (2005)
                 winner Roger Federer. The nSix One Tour
                 features Wilson’s exclusive nCode techno-        The Wilson tennis ball will be the Official Ball of the                 TENNIS BALLS
                  logy, where nano-sized silicone dioxide       Fed Cup and WTA Pro Tour. In addition, Wilson will                       GLOBAL                                       27% (26)
                   crystals are injected into the carbon        continue sponsoring the Davis Cup.                                       US                                           42% (42)
                    matrix of the racket frame, resulting in
                                                                                                                                         EUROPE                                       20% (18)
                    significantly more strength and stability.   YEAR 2007
                                                                                                                                         JAPAN                                        10% (11)
                     Additionally, the nSix One Tour provides   The 2007 market trends for Racquet Sports are ex-
                     unmatched control and feel.
                                                                pected to remain favorable. Wilson Racquet Sports is
                                                                expected to continue its growth through new innova-

W5 Divine Iris
The W5 Divine Iris was introduced
                                                                tive products and geographical expansion in emerging
                                                                markets. By leveraging the strength of the Amer Sports
                                                                sales and distribution platforms, market penetration
                                                                                                                                         TENNIS PARTICIPATION, USA,
                                                                                                                                         PARTICIPATED AT LEAST ONCE
                                                                                                                                                                                     RACQUET SPORTS
                                                                                                                                                                                     NET SALES, EUR MILLION

this summer and quickly became one                              can be achieved more efficiently.                                Millions
of the most popular and well-known                                                                                                                                                    244
                                                                   In the first quarter of 2007, Wilson launched the new         25.0
                                                                                                                                                                                                           225
                                                                                                                                                                                                                 235
additions to the W line. The W5 was                             innovative [K]Factor tennis rackets world-wide. Validat-                                                                    207      210
created exclusively for Venus Williams                                                                                          22.5
                                                                ing the new technology, Roger Federer, the No. 1 tennis
and features Wilson’s nCode frame
technology for added stability, strength                        player in the world, quickly adopted the [K]Factor racket
                                                                                                                                20.0
and power. The design of this racket,                           for competitive play at the 2007 Australian Open.
both classic and elegant, is white with                                                                                         17.5
colorful chocolate and golden colored
                                                                                                                                                                                      02     03      04    05    06
swirls inspired from the work of Venus’                                                                                         15.0
favorite painter, 19th century Austrian artist                                                                                           87 89 91 93 95 97 99 01 03 05

Gustav Klimt. Venus officially debuted this                                                                                               Source: SGMA
racket in professional competition this
past spring at the 2006 French Open.




Open shoe                                                       GLOBAL MARKET,                     GLOBAL MARKET            RACQUET SPORTS                               RACQUET SPORTS
Wilson’s Open tennis shoe for men is the apex of the            TENNIS RACKETS AND BALLS                                    NET SALES                                    NET SALES
Evolution line and designed especially for serious players      EUR 0.5 BILLION (WHOLESALE)        1   EUROPE 34%           1   TENNIS RACKETS 42%                       1 AMERICAS 48%
who demand both exceptional performance and style from                                             2   NORTH AMERICA 32%    2   TENNIS BALLS 21%                         2 EMEA 30%
                                                                1 TENNIS RACKETS 60%               3   JAPAN 18%            3   FOOTWEAR 11%                             3 ASIA PACIFIC 22%
their footwear. The Open shoe ensures every competitive         2 TENNIS BALLS 40%                 4   OTHER 16%            4   OTHER 26%
advantage is maximized and features 360-degree ventila-
tion, all-encompassing stability, the ultimate in toe drag
protection and serviceable outsole radius for enhanced                                                   4                           4                                           3
                     pivot control. In addition, the Open
                                                                                                                 1                                  1
                                                                   2                                                                                                                             1
                           delivers superior comfort and                                           3
                                                                                1
                                 shock absorption, all                                                                           3
                                       in a durable but                                                      2
                                                                                                                                                                             2
                                                                                                                                              2
                                        lightweight perfor-
                                        mance shoe.

                                                                                                                                                                                                                       29
     Wilson is the No. 1 American football company and No. 2 baseball company
     in the world.




     The Wilson Team Sports business is directed from               Wilson baseball and softball continued to strengthen
     Chicago, in the United States, and it employed 758          its position in the industry, with sales growth in base-
     people at the end of 2006.                                  balls of 18%, bats 13%, and ball gloves 11%.
                                                                    Wilson has a dominant position in American football,
     YEAR 2006                                                   and its sales increased by 7% in 2006. Leading the
     The United States is the largest market for team sports,    American football industry in product innovations and
     with sports such as American football, baseball and         chosen as the official ball of the NFL, NCAA and CFL,


                                                                                                                                         FEBRUARY
     basketball attracting massive media attention and being     Wilson continues to maintain a wide gap between its
     played at schools, colleges and clubs. In Japan, baseball   competition.
     is the most-favored team sport.                                The fastest-growing product category was soccer,                                                               cluding
                                                                                                                                                                       ograms in
                                                                                                                                                        p college pr                    and
                                                                 which rose by 45%. The soccer category benefited from                    fa vorite of to                   of Kansas,
                                                                                                                             A longtime                       University                   a
                                                                                                                                         ity of Tennessee,                  s, and Arizon
     Sales                                                       the success of local initiatives in Latin America and the   the Univers                      ’s program          uisville’s
                                                                                                                                        of Loui  sville men           rsity of Lo
     Team Sports continued to perform well, posting record       World Cup. Volleyball and basketball grew by 17% and        University                , and Unive                  e ball of
                                                                                                                                         ton College                   etball is th
                                                                                                                              State, Bos               W ilson bask                      en’s
     earnings for the third consecutive year. Net sales were     6%, respectively.                                                         ams - the                       s and the M
                                                                                                                              women’s te                    NCAA team                       s.
                                                                                                                                               e than 450                       mpionship
     up 8% to 219.6 million euros.                                                                                            choice for
                                                                                                                                          mor                    II and III Cha
                                                                                                                                            ’s NCA A Division I,       e only moi
                                                                                                                                                                                    sture ab-
                                                                                                                               and Women                 e Ball is th                  grip as
                                                                                                                                             NCAA Gam                    g improved
                                                                                                                               The Wilson               ad e, deliverin
                                                                                                                                           sketball m
                                                                                                                                sorbing ba
30                                                                                                                                          eat.
                                                                                                                                players sw
           HOT PRODUCTS
                                                                                                                            WILSON MARKET SHARES 2006 (2005)

                                                          Achievements                                                      US

         ™
A2K gloves                                                The A2K™ is the newest edition to Wilson’s prestigious
                                                          glove line. A custom-tooling of America’s greatest glove,
                                                          the A2K builds on the legendary A2000® patterns with
                                                                                                                            AMERICAN FOOTBALLS

                                                                                                                            BASKETBALLS

                                                                                                                            BASEBALL GLOVES
                                                                                                                                                               80% (78)

                                                                                                                                                               33% (31)

                                                                                                                                                               33% (31)
A custom-tooling of America’s great-
est glove, the A2K builds on legendary                    finer materials and even finer attention to detail. The             BASEBALLS                          25% (23)
A2000® patterns with finer materi-                         Wilson A2K glove is crafted from premium Pro-Stock                BASE/SOFTBALL BATS                 19% (17)
als and even finer attention to detail.                    Select leather for extended durability and unmatched
Painstakingly crafted of Pro-Stock Select                 pocket stability.                                                 WILSON MARKET SHARES 2006 (2005)
leather, the A2K fits like the proverbial                     Wilson secured a relationship with New York Mets               GLOBAL
glove, putting the player in total comfort
                                                          Third Baseman David Wright. Wright uses his own sig-              AMERICAN FOOTBALLS                 80% (78)
and control. Retro colors, rolled and stitched
                                                          nature glove, the Wilson A2K DW5.
Dual Welting™, direct leather embroidery and                                                                                BASKETBALLS                        21% (20)

meticulous craftsmanship throughout make the                 Olympic winner and pitcher Cat Osterman – regarded             BASEBALL GLOVES                    20% (19)
A2K the sharpest-looking and best-performing ball         as one of the world’s best fastpitch softball players –           BASEBALLS                          13% (12)
glove in Major League Baseball®.                          signed a multi-year agreement with Wilson.                        BASE/SOFTBALL BATS                 14% (13)
                                                             Using Wilson and DeMarini products exclusively, the
                                                          Oregon State Beavers won the 2006 Division I College
                                                          World Series by defeating the University of North Caro-
NXTGEN batting helmet
An innovative new helmet design with patent-pending
                                                          lina in the best of three game series.
                                                             The University of Tampa Baseball team, using Wilson
                                                                                                                            TEAM SPORTS
                                                                                                                            PARTICIPATION, USA

                                                                                                                       Millions
                                                                                                                                                            TEAM SPORTS
                                                                                                                                                            NET SALES, EUR MILLION



SnapfitTM Technology. The tough ABS shell and mask
                                                          and DeMarini product exclusively, clinched the Division II   40
                                                                                                                                                                                             220
  meet NOCSAETM standards and keeps you confident          National Championship from Chicago State in a thrilling      35                                   204                        204
                                                                                                                                                                     181         185
                                                                                                                       30
       around the plate. Three-tiered comfort foam        10-inning game, logging a fourth national championship
                                                                                                                       25
             padding is made of the best materials:       for the program. Tampa finished the season 54–6.
                                                                                                                       20
                  durable EPP foam for excellent shock
                                                                                                                       15
                  resistance and open cell foam that      YEAR 2007                                                    10
                  conforms to your head and provides
                                                          Team sports market trends are expected to remain              5
                  comfort, both wrapped with Wilson®                                                                                                         02      03          04    05    06
                  moisture management lining.             stable. With a strong organized participation infrastruc-     0
                                                                                                                            87 89 91 93 95 97 99 01 03 05
                  The helmet has a controlled air vent-   ture, Wilson Team Sports is well-positioned to meet the
                                                                                                                                     Basketball
                  ing design that strategically reduces   needs of both serious and casual players. Team Sports                      American football
                  weight while maintaining optimal        sales are expected to grow in 2007.                                        Baseball
                  safety and durability.                                                                                    Source: SGMA



            ®
NCAA Wave basketball
An innovative new game ball with precision
                                                                                                                            TEAM SPORTS
                                                                                                                            NET SALES
                                                                                                                            1   AMERICAN FOOTBALLS 22%
                                                                                                                                                                  TEAM SPORTS
                                                                                                                                                                  NET SALES
                                                                                                                                                                  1 AMERICAS 95%
                                                                                                                            2   BASEBALLS AND GLOVES 19%          2 ASIA PACIFIC 3%
control WaveTM Technology. Its grooves                                                                                      3   BASE/SOFTBALL BATS 14%            3 EMEA 2%
                                                                                                                            4   BASKETBALLS 13%
are cut into the carcass creating                                                                                           5   APPAREL 9%
recessed ridges, providing superior                                                                                         6   SOCCER 7%
                                                                                                                            7   OTHER 16%
ball control for all aspects of the
game. The patented composite                                                                                                                                               2 3

Leather Cover absorbs moisture                                                                                                           7
                                                                                                                                                 1
in game conditions for maximum
                                                                                                                                 6
ball control. Patented Aqua-Grip™
                                                                                                                                 5
laid-in channels replace traditional                                                                                                                 2
rubber with pebbled composite leather to                                                                                             4
                                                                                                                                             3                                    1
enhance gripability. Patented Cushion Core
Technology combines low-density sponge rubber
and ultra-durable butyl rubber, producing
a basketball with exceptional feel.                                                                                                                                                                31
     From Gene Sarazen to Arnold Palmer, from Padraig Harrington to
     a regular Sunday foursome, golfers rely on Wilson Golf to fuel passion,
     build camaraderie, and create their own legends one round at a time.




                                                                   Golf clubs represent the largest equipment category,
     The Wilson Golf business is directed from Chicago, in       accounting for 49% of sales, followed by golf balls, 25%
     the United States, and it employed 560 people at the end    and bags and gloves at 12%. North America is the largest
     of 2006.                                                    market, accounting for 51% of global sales. Japan is the
                                                                 second-largest market at 28%, followed by Europe at 12%,
     YEAR 2006                                                   with the rest of the world making up 9% of global sales.
     In 2006, the wholesale golf equipment business was
     estimated at 4 billion euros. The golf equipment market
     remained very competitive, with several large global
                                                                 Sales
                                                                 Golf’s sales fell short of its objectives, especially in
                                                                                                                                             OCTOBER
                                                                                                                              During the closing
     brands. The growth rate of golf equipment has been          Japan, but demand for golf equipment also declined                                  months of 2006, Irel
                                                                                                                              Harrington played wh                            and’s Padraig
     slowed by limits and regulations being applied by inter-    in Europe. Net sales declined by 19% to 114.7 million                               at was maybe some of
                                                                                                                                                                                the best golf
                                                                                                                              of his career. At the end
     national golf governing bodies, which limited ability to    euros. Sales were expected to decline with a more                                       of October, Harrington
                                                                                                                             the European Tour Ord                                 clinched
                                                                                                                                                        er of Merit title at the
     introduce major innovations in the golf equipment sector.   focused and disciplined strategy in the United States.      of the season in Valder                             final event
                                                                                                                                                       rama, Spain. Novem
                                                                                                                             defeat Tiger Woods at                             ber saw him
                                                                 The profitability gains from the U.S. strategy were offset                             the Dunlop Phoenix
                                                                                                                                                                               Open after a
                                                                                                                             dramatic final round,
                                                                 by challenges in Japan.                                                              including two playof
                                                                                                                                                                              f holes.


32
           HOT PRODUCTS
                                                                                                                                           WILSON MARKET SHARES 2006 (2005)

                                                                 Achievements                                                              GOLF CLUBS
                                                                 Padraig Harrington, currently ranked No. 7 in the world,
Wilson Staff Di7                                                 won the 2006 Order of Merit as the leading money
                                                                 winner on the European PGA Tour. A victory over Tiger
                                                                                                                                           GLOBAL

                                                                                                                                           US

                                                                                                                                           EUROPE
                                                                                                                                                                                 2% (3)

                                                                                                                                                                                 2% (3)

                                                                                                                                                                                 7% (7)
The new Wilson Staff                                             Woods late in the season propelled Padraig to the top of                  JAPAN                                 1% (2)
Di7 is not like other                                            the money list after three 2nd place finishes.
clubs. A lower
                                                                   Wilson Staff Tour players Markus Brier and José                         WILSON MARKET SHARES 2006 (2005)
profile moves the
                                                                 Manuel Lara recorded their first European tour wins.
center of grav-                                                                                                                            GOLF BALLS

ity down for higher                                                The Ci6 beat popular models from the major competi-                     GLOBAL                                3% (4)
ball flight. A wider sole                                         tors to earn the “Tester’s Top Pick” in the prestigious                   US                                    3% (4)
moves the center of gravity                                      Club Test 2006 in Golf Magazine, the leading golf publi-                  EUROPE                              10% (10)
back for greater stability and                                   cation in the United States.
                                                                                                                                           JAPAN                                 1% (1)
straighter ball flight. A wider tip-shaft prevents twisting
on off-center hits. Together, the complete performance
                                                                 YEAR 2007
delivered by the new Di7 is unmatched.
                                                                 The golf market is expected to remain competitive. The
                                                                 Golf business is expecting to improve its profitability                    TOTAL ROUNDS VOLUME,               GOLF NET SALES
                                                                 with a more focused premium iron strategy. Wilson has
             Wilson Staff Fifty
                                                                                                                                           USA                                EUR MILLION
                                                                 a strong heritage in the premium iron category and a
                                                                                                                                     Millions
                                                                 stable of award-winning products.                                                                             213
                                                                                                                                     550
              A super-soft core that pushes USGA limits
              for initial velocity. An equally soft cover that
                                                                                                                                     500                                                 156   148
              combines power with feel. The new Wilson                                                                                                                                               141
              Staff Fifty brings balance to a golfer’s game                                                                                                                                                115
                                                                                                                                     450
              by delivering synergies between rubber core
              chemistry and ionomer cover blend ratios
                                                                                                                                     400
              to yield a soft, 50 compression golf ball
              with powerful acceleration. Once opposite                                                                                                                        02        03    04    05    06
                                                                                                                                     350
              philosophies, now in perfect harmony.
                                                                                                                                           88 90 92 94 96 98 00 02 04 06

                                                                                                                                           Source: National Golf Foundation



Wilson Staff
W Collection
The new Wilson Staff W
                                                                             GLOBAL MARKET                   GLOBAL MARKET                         GOLF NET SALES               GOLF NET SALES
Collection offers striking
                                                                             EUR 4 BILLION (WHOLESALE)
performance and stun-                                                                                        1   NORTH AMERICA 51%                 1   CLUBS 49%                1 AMERICAS 52%
ning good looks in the                                                       1 CLUBS 70%                     2   JAPAN 28%                         2   BALLS 25%                2 EMEA 29%
                                                                             2 BALLS 23%                     3   EUROPE 12%                        3   BAGS AND GLOVES 12%      3 ASIA PACIFIC 19%
most comprehensive                                                           3 BAGS AND GLOVES 7%            4   OTHER 9%                          4   OTHER 14%
line of high performance
products available for                                                                                               4
                                                                                    3                                                                          4
women today. With its                                                                                            3
                                                                                                                                                                                          3

keen eye on detail and                                                          2                                                                      3
                                                                                                                                                                    1
beautiful, cohesive pre-                                                                                                     1                                                                       1
                                                                                            1                                                                                        2
sentation, the Wilson Staff                                                                                      2
                                                                                                                                                           2
W Collection is sure to turn
heads both on the course and off.


                                                                                                                                                                                                                 33
34
                                                                                                                                                                    PRECOR PAGES 34–37
Precor is a full-line supplier of technically-advanced, premium-quality
fitness equipment for the commercial and home markets. Its main
products are aerobic exercise equipment, strength-training systems and
entertainment systems. Precor is the world’s leading manufacturer
of elliptical crosstrainers.




The originator of the elliptical crosstrainer, Precor has set      YEAR 2006
the global standard for fluid, natural, low-impact fitness           In 2006, the world-wide wholesale fitness equipment market
equipment that is “engineered to move the way you move”            was estimated to amount to approximately 4 billion euros
for 25 years. Today, Precor offers commercial customers            (based on Precor management estimates). In North America,
a total product portfolio of cardio, strength and entertain-       approximately 60% of fitness equipment was sold for private
ment equipment, complemented by innovative technologies            home use.
that address a fitness facility’s business needs. Precor also          The commercial market, estimated to be 1.1 billion euros
markets a full line of cardio and strength equipment for the       of the total market, is divided into 0.6 billion euros in North
home market.                                                       America and 0.5 billion euros in the rest of the world, with
   Precor joined the Amer Sports family of sports equipment        EMEA representing approximately 0.3 billion euros. In EMEA,
brands in 2002. Headquartered near Seattle, in the United          Precor’s fitness equipment sales are highest in the UK,
States, Precor employed 795 people at the end of 2006. Precor      Germany and Italy.
serves its customers through the Amer Sports sales network            Demand drivers in the fitness equipment industry are:
and its own local dealers and distributors in over 100 counties.   number of health club memberships; capacity of health
                                                                   clubs; number of health clubs vs. number of memberships;
Mission                                                            and obesity. The majority of cardio users and gym-goers are
Precor provides health and fitness products and solutions that      female, followed by baby boomers and elderly gym members.
inspire passionate customer loyalty.                                                                                                 PAUL BYRNE, President of Precor

Vision                                                                                                                               “We are known to be innovators in the fitness equip-
Precor’s goal is to become the most recognized and respected                                                                         ment industry. We are respected as a company that
brand in fitness equipment.                                                                                                           builds products that people like to use. We are very
                                                                                                                                     fluid and rhythmical. We want to help people move
                                                                                                                                     beyond, to take their lives to the next level.”
Product categories
Precor offers a combination of fitness equipment for the com-
mercial and home environment, augmented by entertainment
and technology services for commercial markets: elliptical
fitness crosstrainers, treadmills, exercise cycles, climbers,
strength training equipment and systems as well as techno-
logy and entertainment systems and services.




                                                                                                                                                                                            35
     Sales and EBIT                                             Achievements
     Precor’s net sales were up 9% to 275.6 million euros. Of   Precor’s sales, particularly to fitness clubs, have conti-
     net sales, the Americas generated 77%, EMEA 16% and        nued to grow in North America. Much of Precor’s suc-
     Asia Pacific 7%. Sales were up 7% in the Americas, 18%      cess in commercial markets was drawn from the suc-
     in EMEA and 13% in Asia Pacific.                            cess of the new Experience line of commercial cardio
        Precor’s EBIT increased 12% to 34.8 million euros.      equipment that integrates Cardio Theater personal
     Non-recurring quality-related costs weakened earnings      viewing screens in equipment displays. Further, Precor
     by approximately 2 million euros.                          is extending its global leadership in entertainment and
                                                                messaging within fitness clubs, introducing ClubCom in
                                                                new markets in Europe and Asia.
                                                                   In July, Precor and the Hilton Hotels Corporation
                                                                signed an extensive agreement to introduce Fitness by        Precor signed an ext
                                                                                                                                                  JULY
                                                                                                                                                        ensive cooperation
                                                                Precor facilities in hundreds of hotels belonging to four    with the Hilton Hotels                          agreement
                                                                                                                                                         Corporation. Fitness
                                                                                                                            facilities will be install                         by Precor
                                                                Hilton chains in the United States.                                                   ed in hotels belonging
                                                                                                                            four chains. Precor                               to Hilton’s
                                                                                                                                                    will design the interior
                                                                                                                            choose the equipment                             decor and
                                                                                                                                                       .




36
           HOT PRODUCTS
                                                              Precor is adding to its reputation for outstanding            GLOBAL MARKETS
                                                                                                                            (WHOLESALE)*
                                                           service, selected by North American fitness club chain
                            ®
Precor EFX 576i                                            Anytime Fitness as its Best Vendor in any product or
                                                           service category. Precor was selected through a survey
                                                           of franchisees that assesses vendor responsiveness,
                                                                                                                            NORTH AMERICA COMMERCIAL

                                                                                                                            INTERNATIONAL COMMERCIAL

                                                                                                                            WORLWIDE FITNESS EQUIPMENT MARKET
                                                                                                                                                                            EUR 0.6 BILLION

                                                                                                                                                                            EUR 0.5 BILLION

                                                                                                                                                                             EUR 4 BILLION
Precor enhances the club
                                                           quality, price and follow-up. Anytime Fitness has more           * Converted into euro at average exchange rates over the
member’s experience with the
                                                           than 700 franchise locations in the United States and              review year
EFX®576i, the first total-body
elliptical to offer varied stride                          Canada.
motion and seamlessly integrate
entertainment into the display.                            YEAR 2007
                                                                                                                            US HEALTH CLUB
Featuring Precor’s patented                                In 2007, Precor is expected again to register above-             MEMBERSHIPS
CrossRamp® and optional
                                                           market growth, driven primarily by marketshare gains in     Millions
Cardio Theater screen, the
                                                           the commercial segment. For the Consumer business,          45
innovative EFX®576i is the
flagship of Precor’s popular                                Precor is expected to experience a transitional year,       40

Experience® cardio line.                                   with the introduction of a new portfolio of products that   35

                                                           will drive significantly higher growth rates in 2008.        30

                                                                                                                       25

                                                                                                                       20


                Precor S3.23
                Training using the Precor S3.23 multi-
                                                                                                                       15

                                                                                                                       10
                                                                                                                            89   91   93    95    97   99   01   03    05
                                                                                                                                                                               Source: IHRSA


                function home gym ensures all-around
                muscle development and at the same
                time improves your balance and coordi-
                                                                                                                            PRECOR NET SALES                                   PRECOR EBIT
                nation. The S3.23 allows for natural and                                                                    EUR MILLION                                        EUR MILLION
                individual motions and focuses training
                                                                                                                                                                 276
                on several muscles and joints, teaching                                                                                                 252
                                                                                                                                                                                                               34.8
                                                                                                                                                                                                        31.1
                them all how to work together. With the                                                                                          210
                                                                                                                             202*                                                         26.8
                S3.23, strength training can be per-                                                                                  176                                       23.4*            23.9
                formed while moving, standing, sitting
                on an exercise ball, or using the Precor
                Home Bench.

                                                                                                                             02       03         04     05       06              02       03     04     05     06

                                                                                                                            * Pro forma                                        * Pro forma



Precor M9.57
Precor brings the fitness club experi-
                                                                                                                            PRECOR                                             PRECOR
                                                                                                                            NET SALES                                          NET SALES
ence to the home with the new M9.57                                                                                         1 CLUBS AND INSTITUTIONS 74%                       1 AMERICAS 77%
low impact treadmill, drawing on the                                                                                        2 HOME USE 26%                                     2 EMEA 16%
                                                                                                                                                                               3 ASIA PACIFIC 7%
durability, styling and feel of Precor’s
outstanding new Experience® com-
mercial treadmills. A great choice                                                                                                                                                         3
for high-mileage runners seeking                                                                                                  2                                                   2
the best in home fitness. This new
flagship model features an innova-
tive new drive system introduced with                                                                                                             1
                                                                                                                                                                                                  1
the Experience line, which further enhances
subtle speed changes of Precor’s Integrated
Footplant Technology®.
                                                                                                                                                                                                                      37
38
                                                                                                                                                                 ATOMIC PAGES 38–41
Atomic is the world’s leading manufacturer of alpine skis. Its sports
categories include alpine skiing, cross-country skiing and snowboarding.




Established in 1955, Atomic is the No. 1 global alpine ski        YEAR 2006
brand. Just as our customers do, we worship gliding on snow.      In 2006 the wholesale global winter sports market was
Nestled in a valley surrounded by the Austrian mountains,         estimated to amount to 1.9 billion euros, with Europe being
we are known for building the most technologically-advanced       the largest region representing 63% of global sales, followed
ski equipment on the planet. But the passion shared by our        by North America, 24% and Japan, 11%. Atomic’s global mar-
engineers and craftsmen isn’t confined by that valley. The         ket share in the alpine ski business was approximately 16%
spirit of Atomic can be found on summits and slopes around        in 2006.
the world, wherever people ski our products.                         The winter sports market is highly seasonal, with the
  Headquartered in Altenmarkt, Austria, Atomic employed           busiest months for deliveries being September and October.
893 people at the end of 2006. Its dedicated sales network        Pre-orders are collected during the spring, which creates
within the Amer Sports organization serves customers in           a need for flexibility to adjust the production mix based on
about 60 countries.                                               incoming pre-orders.

Mission
Atomic is a world-wide market and technology leader in all
important segments of winter sports activities. We aim to
produce premium winter sports equipment utilizing a multi-
brand strategy.                                                                                                                   MICHAEL SCHINEIS, President of Atomic


Vision                                                                                                                            “Atomic produces the best quality products in our
                                                                                                                                  field and we will continue to launch even more
Atomic is the No. 1 alpine ski brand globally. Atomic’s goal is
                                                                                                                                  innovative products in 2007 in the categories of
to further strengthen its position in other winter sports prod-
                                                                                                                                  alpine skis, alpine boots, cross-country skiing and
uct categories.                                                                                                                   snowboarding.The synergies with our sister com-
                                                                                                                                  pany Salomon will strengthen our competitiveness.
Sports categories                                                                                                                 The Atomic brand will further be supported strongly
Atomic’s product categories include alpine skiing, cross-                                                                         by top-performing athletes on our international
country skiing, and snowboarding. Atomic manages the fol-                                                                         racing teams.”

lowing brands: Atomic for alpine skis, nordic skis and snow-
boards; Dynamic for alpine skis; and Volant for top-of-the-line
alpine skis.




                                                                                                                                                                                        39
     Sales and EBIT                                                Achievements
     Atomic’s net sales declined by 4% to 204.8 million            The industrial cooperation plans between Atomic and
     euros in 2006. Of net sales, the Americas generated           Salomon are progressing as planned. These changes
     18%, EMEA 76% and Asia Pacific 6%. Sales declined              will be carried through during 2007.
     by 3% in the Americas, 4% in EMEA, and by 13%                    Atomic is continuously improving its supply chain
     in Asia Pacific.                                               management. This enables more flexible production and
        The distribution of Asics products, a non-core cat-        improved net working capital, also increasing customer
     egory for Atomic, ended in Austria, lowering net sales        satisfaction.
     by 11.3 million euros. Exclusive of the effect of Asics,         Despite Atomic’s strong heritage in alpine skiing, the
     net sales would have been at last year’s level.               company has also increased its engagement in Nordic
        Atomic’s EBIT decreased by 25% and was 16.6 million        racing. In 2006, Atomic won the overall world cups both
     euros.                                                        in alpine skiing (Benjamin Raich, Austria) and in cross-
        The fastest-growing product category was Atomic
     cross-country products, up 32%. Sales of ski boots
     increased by 29%. Sales of alpine skis declined by 5%.
                                                                   country skiing (Tobias Angerer, Germany).
                                                                      In 2006/07, Atomic continues to succeed on the
                                                                   international competition circuit. Skiers using Atomic
                                                                                                                                           NOVEMBER
                                                                                                                                The opening race of
                                                                                                                                                     the alpine skiing Wo
        Atomic-branded alpine skis are the No. 1 ski brand         systems (cross-country skis, boots and bindings) captured    Finland, was really an                    rld Cup in Levi,
                                                                                                                                                        Atomic party. Betwe
                                                                                                                               women racers, Atomic                           en men and
     globally. A total of approximately 820,000 alpine ski pairs   more than 40 podium places in cross-country, biathlon                                 skiers took five of the
                                                                                                                                                                                six avail-
                                                                                                                               able podium places
     were shipped in 2006.                                         and nordic combined.                                                              . Benjamin Raich of
                                                                                                                               happy to celebrate his                       Austria was
                                                                                                                                                       first win at a World Cup
                                                                                                                               event – and with an                              -opening
                                                                                                                                                    especially fine descen
                                                                                                                                                                            t.



40
           HOT PRODUCTS
                                                              YEAR 2007                                                                        GLOBAL MARKETS
                                                                                                                                               (WHOLESALE)*
                                                              As the year began, temperatures remained higher than

Hawx
Atomic Hawx is a revolutionary new
                                                              usual in Europe, Asia and the Eastern United States.
                                                              The market for winter sports equipment is expected to
                                                                                                                                               ALPINE SKI EQUIPMENT

                                                                                                                                               CROSS-COUNTRY SKI EQUIPMENT
                                                                                                                                                                                                 EUR 1.3 BILLION

                                                                                                                                                                                                 EUR 0.2 BILLION

                                                              fall short of the 2005/06 season both in terms of volume                         SNOWBOARDS                                        EUR 0.4 BILLION
ski boot concept. Hawx is the first
                                                              and value due to uncertainty caused by uncommon                                  * Converted into euro at average exchange rates over the
boot ever with forefoot flexibility                                                                                                               review year
                                                              weather during the 2006/07 winter season.
which improves performance,
optimizes body position over                                     Atomic’s primary goal for 2007 is to improve its
                                                                                                                                               GLOBAL MARKETS 2006 (2005)
the ski, improves balance and                                 profitability. Cooperation with Salomon in all product
                                                                                                                                               EUROPE                                                   63% (62)
enables more direct transmis-                                 categories is one way the company is aiming for cost
sion of power for more precise                                                                                                                 NORTH AMERICA                                            24% (25)
                                                              savings and efficiencies.
skiing. Improved performance characteristics are                 In order to strengthen its leading position in its key                        JAPAN                                                    11% (11)
combined with greater comfort. Haxw boots make ski-                                                                                            OTHER                                                      2% (2)
                                                              markets and remain a major player in all of its product
ing less strenuous. Thanks to the improved freedom of
                                                              categories, Atomic has launched new innovative prod-
movement in the forefoot area, these boots also make                                                                                           ATOMIC MARKET SHARES 2006 (2005)
walking much easier and more comfortable.                     ucts such as the Hawx boot and Nomad ski.
                                                                                                                                               ALPINE SKIS                                              16% (16)

                                                                                                                                               BINDINGS                                                 16% (16)



     Nomad with Beta TFC                                                                                                                       SKI BOOTS

                                                                                                                                               CROSS-COUNTRY SKI EQUIPMENT
                                                                                                                                                                                                          6% (4)

                                                                                                                                                                                                          9% (9)

       The new Nomad models are real all-rounders.                                                                                             SNOWBOARDS                                                 3% (3)

        They are very light, offering optimal rigidity and
          harmonious flexibility. A width of between
            72 mm and 86 mm in the middle of the ski          ATOMIC NET SALES                      ATOMIC EBIT                                PARTICIPATION, SKIER DAYS
             and a side cut for medium curve radii make       EUR MILLION                           EUR MILLION                                IN AUSTRIA
               the Nomad enormously broad-ranging.
                 The Nomad impresses with its versatil-                                                                                   Millions
                                                                                        214          39.6
                                                                  202             206         205                                         75
                  ity, control and performance. The Beta                    188
                    technology makes the ski dynamic,                                                                29.6                 70
                                                                                                              28.3
                       torsion-proof and ensures optimal
                         edge grip and dynamics. The TFC                                                                    22.2          65

                          (Torsion Flex Control) system                                                                            16.6
                                                                                                                                          60
                          makes the ski soft where neces-
                          sary for optimal skiing pleasure.                                                                               55
                                                                                                                                                                                                 Source: WebMark Seilbahnen
                                                                  02        03    04    05    06     02       03     04     05     06
                                                                                                                                          50                                                     - Trendmonitor winter 2005/06




                                                                                                                                                    1


                                                                                                                                                             2

                                                                                                                                                                     3


                                                                                                                                                                             4

                                                                                                                                                                                     5

                                                                                                                                                                                             6
                                                                                                                                                /0


                                                                                                                                                         /0

                                                                                                                                                                  /0


                                                                                                                                                                          /0

                                                                                                                                                                                  /0

                                                                                                                                                                                          /0
                                                                                                                                               00


                                                                                                                                                        01

                                                                                                                                                                 02


                                                                                                                                                                         03

                                                                                                                                                                                 04

                                                                                                                                                                                         05
     G2                                                       ATOMIC NET SALES                      ATOMIC NET SALES
     G2 Grip&Glide is Atomic’s newly patented techno-         1   ALPINE SKI EQUIPMENT 84%          1 EMEA 76%
     logy. “Grip” is for an effortless dynamic kick, and      2   CROSS-COUNTRY 7%                  2 AMERICA 18%
                                                              3   SNOWBOARDING 6%                   3 ASIA PACIFIC 6%
     “glide” for excellent gliding properties. A complex      4   OTHER 3%
     core inside the ski ensures an optimal hardness
     setting. In the previously unique base system,
     sharp, three-dimensional grip edges bite into all                      3 4                                 3
                                                                        2
     types of snow for a safe but dynamic kick. The large                                                 2

     volume which forms under the many small edges
     ensures additional stability and smoothness. The
     new technology is used in the Motion, Fitness and                            1
                                                                                                                      1

     Balance cross-country skiing segments.


                                                                                                                                                                                                                                 41
42
                                                                                                                                                                     SUUNTO PAGES 42–45
Suunto has a passion to create sports instruments that allow you
to measure, analyze, understand and improve your performance.




Founded in 1936 and having celebrated its 70th anniversary in          YEAR 2006
2006, Suunto is a leading designer and manufacturer of sports          In wristop computers, Suunto’s main priority for 2006 was to
instruments for diving, mountaineering, hiking, skiing, sailing        establish a market position in the heart rate monitor market
and golf. True to its roots, Suunto remains the world’s larg-          through the successful launch of the Suunto t-series. This
est compass manufacturer. Prized for their design, accuracy            key target was reached as the new t-series was Suunto’s
and dependability, Suunto sports instruments combine the               growth engine in 2006. Also, outdoor wristop computer sales
aesthetics and functionality of watches with sport-specific             were significantly up from 2005 after a few stagnant years.
computers that help athletes at all levels analyze and improve            In the diving instruments category, Suunto achieved strong
their performance.                                                     growth, with the new Suunto D6 wrist-sized dive computers
  Headquartered in Vantaa, Finland, Suunto employed 522                as the main growth driver. Along with wristop dive computers,
people at the end of 2006. Its dedicated sales network within          console dive computers also had a favorable year. This was
the Amer Sports organization serves customers in approxi-              a good achievement as the market conditions in diving were
mately 60 countries.                                                   challenging, and some manufacturers reported being signifi-
                                                                       cantly off of their previous year’s levels.
Mission                                                                                                                                JUHA PINOMAA, President of Suunto
Suunto enhances sports experiences by providing accurate
                                                                                                                                       “For 70 years Suunto has provided accurate, reliable
and relevant information, inspiring users to reach their full
                                                                                                                                       information to people in need of it. Our instruments
potential.                                                                                                                             enable our users to reach their goals more effec-
                                                                                                                                       tively and get more out of their sports experience.
Vision                                                                                                                                 Our products are often very critical to the user.
Suunto’s goal is to be the world’s most desired sports instru-                                                                         Therefore we at Suunto take pride in maintaining
ment brand.                                                                                                                            the highest quality standards for our products.”


Sports categories
Suunto is the leading manufacturer of sports instruments
for a variety of sports, including diving, training, skiing, hiking,
sailing and golf. Suunto is the market leader in dive comput-
ers. The company’s strategy is to focus on sports activities
where advanced measurement technology, data processing,
and specific algorithms can create significant benefits for
active participants.



                                                                                                                                                                                              43
     Sales and EBIT                                            Achievements
     Suunto’s net sales increased 13% to 81.3 million euros.   Suunto developed a new training line that helps users
     Of net sales, the Americas generated 33%, EMEA 55%        achieve fitness and performance goals with intelligent
     and Asia Pacific 12%. Sales in the Americas increased      real-time information and advice. The Suunto t-series
     6%, 17% in EMEA, and 18% in Asia Pacific.                  includes four different heart rate monitors, complemen-
        Suunto’s EBIT amounted to 7.0 million euros (3.4).     tary training analysis PC software, and sports-specific
     There was a fire at a supplier’s premises in May 2005,     accessories. The new Suunto t-series became available
     and Suunto’s result for 2006 includes 2.5 million euros   in the fall of 2006.
     in insurance claims received for the loss of sales mar-      The Suunto D9 dive computer was nominated for
     gins due to the fire.                                      one of the world’s most esteemed design awards, the
        Overall, sales of wristop computers increased 33%.     German Design Preis – considered by many influential
     The new t-series training line was the key growth con-    people in the design industry to be “the prize of prizes.”
     tributor.
        Sales of Suunto’s diving instruments increased 10%
     with the new Suunto D6 wristop computer as the main
                                                                  In October 2006, Suunto and Nokia announced their
                                                               co-operation on developing Wibree radio technology.
                                                               Wibree enables a standardized wireless connection
                                                                                                                            German Andrea Bre
                                                                                                                                                JULY
                                                                                                                                               de won the Frankfurt
     growth driver. Sales of diving and water sports suits     between sports electronic devices and mobile internet        2006 IRONMAN Eur                       er Sparkasse
                                                                                                                                                opean Championsh
     declined.                                                 devices.                                                     Suunto t6. She raced                    ip using the
                                                                                                                                                 her way to an impres
                                                                                                                            9:16:17h.                                 sive win in
        Diving instruments and wristop computers accounted
     for a total of 72% (66%) of Suunto’s net sales.



44
           HOT PRODUCTS
                                                                In December, the editors of US Outside magazine                 PARTICIPATION U.S. OPEN WATER
                                                                                                                                NEW DIVER CERTIFICATIONS
                                                              ranked the Suunto t4 heart rate monitor second in the


              Suunto t3 and                                   “O list” of year’s most important people, ideas, trends     Thousands

                                                              and gear.                                                   180

                                                                Suunto’s co-operation with FIS (International Ski Fede-   175


              GPS POD                                         ration) and Wige-Data continued in Nordic Combined
                                                              skiing during the 2005/06 season. With the Suunto Team
                                                                                                                          170

                                                                                                                          165
                In July 2006, the new Suunto t3 heart         POD and Suunto heart rate belts, the athletes’ heart
                                                                                                                          160
                rate monitor and GPS POD combination          rates and percentage of maximum heart rates were
                  received the ISPO Outdoor Award at          broadcast to international TV viewers.                      155
                                                                                                                                                                                     Source: DEMA and
                      the ISPO Trade Fair in Munich. The                                                                  150                                                        company estimates
                       ISPO jury praised the Suunto t3 for                                                                       00       01        02   03        04     05    06
                         its broad range of functions and     YEAR 2007
                           in particular for its usability.   The goal for this year is to continue to strengthen
                                                                                                                                SUUNTO NET SALES
                            With the aid of the Suunto GPS    Suunto’s core processes and generate growth through               EUR MILLION
                             POD, the user can track speed    the most attractive sports instruments segments.
                             and distance traveled when,        Suunto continues to focus on the training, outdoor               85
                                                                                                                                                                               81
                             for example, skating or cross-   and dive instrument categories. Suunto’s sales are
                                                                                                                                               77        77
                                                                                                                                                                    72
                             country skiing.
                                                              expected to increase in 2007 thanks to new product
                                                              launches. This should also raise the company’s profit-
                                                              ability.



Suunto D9                                                                                                                        02            03        04         05         06



Titanium                                                                                                                        SUUNTO EBIT
                                                                                                                                EUR MILLION
In November 2006, Suunto introduced
its flagship Suunto D9 dive computer                                                                                              10.5
in a brilliant titanium bracelet. Excel-
ling in business, travel and underwater                                                                                                        7.7       8.0
                                                                                                                                                                               7.0
exploration, the Suunto D9 titanium is a full
decompression dive computer with air integration
and a digital compass.                                                                                                                                              3.4



                                                                                                                                 02            03        04         05         06

Suunto X9i &
Google Earth                                                                                                                    SUUNTO NET SALES
                                                                                                                                1 WRISTOP COMPUTERS 41%
                                                                                                                                2 DIVING INSTRUMENTS 31%
                                                                                                                                3 OTHER 28%
                                                                                                                                                                                          SUUNTO NET SALES
                                                                                                                                                                                          1 EMEA 55%
                                                                                                                                                                                          2 AMERICAS 33%
                                                                                                                                                                                          3 ASIA PACIFIC 12%
In December 2006, new Google Earth™
-compatible PC software for the Suunto
                                                                                                                                                                                                 3
X9i wristop GPS was released. The
                                                                                                                                      3
Suunto Track Exporter PC software allows                                                                                                                       1
users to export “tracks” from their Suunto                                                                                                                                                                 1
                                                                                                                                                                                            2
X9i wristops to Google Earth, where they can
view their adventures anywhere on the globe                                                                                                2

with real satellite imagery.


                                                                                                                                                                                                               45
     DEVELOPING TOMORROW’S                   Research and development hinges on in-depth knowledge of sports and
                                             catering to consumer needs. Cooperation with top athletes and raw material
     PRODUCTS                                suppliers often yield completely new types of solutions in the development
                                             of sports equipment. Amer Sports not only keeps abreast of developments
                                             but actively pushes the limits, sparking new sports and leisure trends.
          R&D EXPENDITURE
          EUR MILLION

                                      58.5



                               39.4          In 2006, Amer Sports R&D expenditures amounted to 58.5 mil-     Because of Amer Sports’ reputation as a technologically-
                 30.7   31.3                 lion euros. Capex amounted to only 2.3% of net sales, whereas   advanced company, top athletes enjoy collaborating and
          23.9                               in 2006, R&D expenditures amounted to 3.3% of net sales. R&D    assisting our in-house experts during the innovation process.
                                             costs are expensed in the year they are incurred.
                                                Continuous investment in R&D is absolutely critical to our   BEST RESULTS AND MOST ENJOYMENT
           02    03     04     05     06     mission of being the undisputed No.1 sports equipment com-      We are true experts in all of our sports. We set innovation and
                                             pany. Our dedicated, sports-specific R&D program enables our     usability standards in every sport by constantly advancing our
                                             brands to continuously roll out new breakthrough products.      products with innovative technologies and outstanding design.


46
                                                                                                                                          AWARD-WINNING PRODUCTS

                                                                                                                                      Suunto t3 and GPS POD
                                                                                                                                      Only a week after it was launched, Suunto’s new t3 heart rate monitor
                                                                                                                                      and GPS POD combination received an ISPO Outdoor Award at the ISPO
                                                                                                                                      Trade Fair in Munich. The ISPO jury praised the Suunto t3 particularly for
                                                                                                                                      its broad range of functions and usability.

                                                                                                                                      Arc’teryx AC² line of backpacks
                                                                                                                                      Arc’teryx’s Advanced Composite Construction line of backpacks has
                                                                                                                                      received a veritable wave of awards. The AC² backpack received an ISPO
                                                                                                                                      Outdoor Award for Technology and Gear of the Year award from Outside
                                                                                                                                      Magazine. Since then, it has also been recognized by magazines such as
                                                                                                                                      Backpacker, Men’s Health and Vertical.

                                                                                                                                      Precor Cardio Theater
                                                                                                                                      For the third consecutive year, the international fitness industry selected
                                                                                                                                      Cardio Theater as the top entertainment supplier in the Nova7 People’s
                                                                                                                                      Choice awards program sponsored by Fitness Management magazine.
                                                                                                                                      Additionally, Cardio Theater won the 2005 Nova7 award.

                                                                                                                                      Wilson Ci6 irons
                                                                                                                                      The Ci6 beat popular models from its main competitors to earn the
                                                                                                                                      Tester’s Top Pick in the prestigious Club Test 2006 in Golf Magazine. Also,
                                                                                                                                      Wilson Staff women’s irons and drivers were chosen as Best in Class in
                                                                                                                                      their respective product categories in the UK market.

                                                                                                                                      Wilson nCode tennis rackets
                                                                                                                                      Wilson’s industry-leading high-performance racket line featuring nano-
Attention to detail, high quality, functional dependability and a   units. In addition, Amer Sports R&D experts engage in close-      technology received the Consumer Product Award for Industrial Design at
passion to constantly grow our sports elevate the performance       knit and unique cooperation with universities and research        the 2005 Annual Design Review, presented by I.D. magazine.

of our products.                                                    groups. Independent scientific research often paves the way        Wilson W Line tennis rackets
   Performance is the key driver in our development of sports       for new product innovations.                                      The industry’s first comprehensive high-performance line of rackets
equipment, technical apparel, and footwear. As our products            Working closely with top athletes and coaches has long         developed exclusively for women, the Wilson W line was honored at the
are essential for participation in many sports, the fundamental     traditions within our group. For example the Wilson Advisory      2006 I.D. Annual Design Review, presented by I.D. Magazine. The W6
focus of our product design is functionality, but progressive       Staff, which includes respected professional coaches and          racket also was awarded Tennis Magazine’s Editor’s Choice Award.

beauty and coolness are becoming increasingly important. We         athletes, was set up in 1922.                                     Wilson Women’s Wildcard shoe
do not mimic fashion trends. In many cases, our products are           As proof of our actions, we are proud to witness the success   This extremely popular performance shoe, part of Wilson’s comprehen-
in the forefront when new trends are born.                          of our products, whether on the podium or through feedback        sive Evolution line, received Tennis Magazine’s Editor’s Choice Award.
                                                                    from happy customers around the world.                            The Wildcard received top marks for comfort, cushioning and design by
FROM IDEA TO PRODUCT                                                   The R&D process is never-ending but rewarding as we            female players.

In-depth knowledge of sports and a deep understanding of dif-       continue to push the limits by launching new products that        Salomon Fusion shoe
ferent consumer needs are essential parts of our product de-        outperform our competition.                                       Salomon’s Fusion shoe was awarded the l’Escarpin de Cristal 2006
velopment processes. New products and ideas are developed                                                                             in technological innovation for its Seamless Technology concept. The
and tested with both top athletes and active participants. Even                                                                       ceremony took place in front of 250 guests representing the French and
the smallest details can be critical for product performance.                                                                         international footwear industry.

   Our in-house R&D staff creates a unique internal network                                                                           Mavic Wintech HR and Crossmax SX
that exchanges ideas and know-how within the group. This en-                                                                          For the second year in a row, Mavic’s products were honored at Eurobike
ables us to benefit from the cumulative know-how within our                                                                            by an expert jury including manufacturers, distributors, media represen-
                                                                                                                                      tatives and designers. The two products selected were the new wireless
                                                                                                                                      cycle computer Wintech HR and brand new top range Enduro wheelset
                                                                                                                                      Crossmax SX.                                                                  47
                                                                                                                                                         SEPTEMBER                    e in Friedrischafen, Germany.
                                                                                                                                     Mavic employees and the Ksyrium ES at Eurobik
                                                                                                                                                                                         Ksyrium ES wheelset was
                                                                                                                                     Mavic won a Silver Award for this wheel set. The
                                                                                                                                                                                                of Maxtal aluminum,
                                                                                                                                     designed for toplevel competition cycling. The combination
                                                                                                                                     carbon fiber and titanium  has produced especially lightweight and responsive
                                                                                                                                     wheels.




     CUSTOMER SERVICE                                               Our broad portfolio of products makes Amer Sports a major year-round
                                                                    supplier to sports retailers and allows us to foster long-term business
     AND SUPPLY CHAIN                                               relationships. Our comprehensive sales and distribution network enables
     MANAGEMENT                                                     us to bring new products to market almost simultaneously world-wide.

     The Amer Sports international sales and distribution network      Local Amer Sports sales companies are responsible for the    EFFICIENCY AND SERVICE
     rests on a solid foundation: global brands with real appeal    sales and distribution of our products in their own markets.    The integration of Amer Sports and Salomon sales organiza-
     to consumers; a wide spectrum of sports; close ties to the     These companies have experience and specialized expertise       tions started in 2006. This overhaul seeks to improve service
     retailers; and a deep understanding of the local market and    in every type of sport we participate in. Furthermore, local    capabilities and efficiency. Until now, both Amer Sports and
     customer behavior.                                             personnel know their own markets and the preferences of         Salomon have had their own sales companies in all the major
                                                                    sports enthusiasts in their own territories. This allows them   sports equipment markets. We are in the process of realign-
     FIRST-CLASS SERVICE                                            to adapt both product offerings and marketing to the needs      ing this structure. The companies will transition to a single
     The Amer Sports product portfolio is sold world-wide. Prod-    and conditions of each market. This market know-how is also     local subsidiary model in most countries. Each of these com-
     uct distribution is primarily handled by Amer Sports sales     leveraged in research and product development in different      panies will be headed up by a country manager. Back office
     companies. In small markets, distribution is handled through   business segments.                                              functions will be consolidated as much as possible. However,
     independent importers and distributors who work closely with                                                                   the sales staffs handling Atomic and Salomon will be kept
     individual Amer Sports business areas.                                                                                         separate to ensure our specialist approach. Our sales staff


48
is experienced and has strong specialized expertise in each      SERVING THE WHOLE SPECTRUM OF SPORTS RETAILERS
respective sport.                                                Developing our operations in cooperation with our partners
                                                                 is extremely important. It is essential to increase product
THREE LARGE GEOGRAPHICAL SEGMENTS                                offerings and offer the right kinds of products and services to
The Amer Sports Winter and Outdoors North Americas unit          our retail customers. Amer Sports experts serve the whole
was established in the United States in 2006. The sales func-    spectrum of retailers from specialist stores to large chains.
tions of Salomon, Atomic and Suunto U.S. were integrated into       The Amer Sports customer base can be divided into three
this unit. However, Wilson’s and Precor’s sales organizations    main world-wide groups:
will continue to operate as independent units in the United
States. The U.S. is both Wilson’s and Precor’s home market,      • large retail stores
thus they have the necessary scale to handle their own sales     • sports equipment chains
                                                                                                                                       GEOGRAPHIC BREAKDOWN OF
and marketing.                                                   • specialist stores (e.g. skiing, tennis, golf, outdoor, and diving
                                                                                                                                       AMER SPORTS NET SALES
   Our individual sales companies have been grouped into           stores)
three large geographical segments: Asia Pacific, EMEA (Eu-                                                                                                         PRO
                                                                                                                                                                FORMA
rope, Middle East and Africa) and Americas, which includes          All of our customers place a high value on their suppliers’        EUR MILLION      2006      2005

the United States, Canada and Latin America. Asia Pacific is      knowledge of the sports equipment market and their expertise          AMERICAS        815.7     783.3

headed up from Tokyo, Japan, EMEA from Münich, Germany.          in individual sports and categories. Beyond these attributes,         EMEA            781.8     758.3

In the United States, the sales functions of Salomon, Atomic     reliability, delivery accuracy and speed have become increas-         ASIA PACIFIC    195.2     190.4

and Suunto will be directed from Odgen, Utah. Precor ‘s sales    ingly important competitive advantages for sports equipment           TOTAL          1,792.7   1,732.0

organization is managed from Seattle, Woodinville, Washington,   suppliers.
and Wilson sales are managed from Chicago, Illinois.

                                                                                                                                                                          49
                        MARCH–APRIL                                                                             SEPTEMBER              tions meeting took place in
                                                                                                                                                                                                      MAY
     During the Saab Salomon Transalp Xwing Rally, talented skiers mastered the                  The annual Amer Sports Communica                                      Suunto’s new t-line series heart rate monitors and accesso
                                                                                                                                                                                                                                  ries were launched
                                                                                                                                                      cooperation
     diverse terrain offered by the most renowned resorts in the world for seven                 Chicago, USA.  The meeting’s goal was to strengthen                                                                           sales and marketing
                                                                                                                                                           Sports,     internally in Salzburg, Austria. The company’s global
     straight days. The athletes completed this grueling but exciting new event format,          between the marketing  and communications staffs of Amer                                                                         the world of heart
                                                                                                                                                                       personnel came together for Suunto’s deeper foray into
                                                                                                 Atomic, Precor, Suunto, Wilso  n, Salomon, Mavic and Arc’teryx.
     focused on mountain exploration while seeking checkpoints, from early in the
                                                                                                                                                                       rate monitors. A banquet   at Salzburg castle was the climax of a day full of
                                                                                                                                     marketing professionals from
     morning till late in the afternoon. The days were full of daily special events such         Altogether 24 communications and                                      presentations and new product introductions.
     as Freeride, Slopestyle sessions and Giant Slalom.                                          all around the world participated this year.




          HUMAN RESOURCES                                                                  The heart and soul of the Amer Sports family are the people that create and
                                                                                           use our products. We choose to be a company that cares about the whole
                                                                                           person and has values that our employees, customers and shareholders can
                                                                                           all relate to.


          Amer Sports is one of the most profitable sports equipment                        THE AMER SPORTS CULTURE                                                   proactive approach to our own development and renewal. The
          companies in the world. Our brands and products are well-                        Our values are the basis of our work. The determination to                ability to stay on top of changes, challenge the status quo, and
          known and recognized all over the world. We are also deter-                      win requires high performance. As we have a family of leading             continue to innovate are central to our daily work.
          mined to hold on to our strong position as a desirable employer.                 sports brands, one of our key principles is team spirit. Our
             The ability to contribute both as an individual and as part                   culture is informal by nature, and open dialog is encouraged.             PERFORMANCE MANAGEMENT
          of a team is essential to our success. At Amer Sports, we                        Fair play requires our people to be accountable for following             We believe that performance management is a shared respon-
          strongly believe that our people add value to the business                       the rules and acting, under all circumstances, on the basis of            sibility. Our performance management process ensures that
          through their motivation, professional competencies and                          our values, as well as respecting others both within the corpo-           the company’s strategy is mobilized at the individual level by
          ability to operate in a constantly changing environment. Our                     ration and when dealing with external partners.                           cascading it from the top to all individuals in the organization.
          successful employees consistently demonstrate a strong work                        We encourage our people to always question the ways we                  It is our core management process, used by our managers to
          ethic, leading to high performance.                                              do things. We seek to learn from our mistakes and take a                  coach and support their people.


50
            EMPLOYEES                                           EMPLOYEES BY                      EMPLOYEES BY                   EMPLOYEES                                   EMPLOYEES
            AT YEAR END                                         BUSINESS SEGMENT                  GEOGRAPHICAL AREA              BY FUNCTION
                                                                1   SALOMON 36%                   1 EMEA 51%                     1   MANUFACTURING AND SOURCING 40%          1 MEN 62%
                                                                2   WILSON 29%                    2 AMERICAS 41%                 2   SALES AND DISTRIBUTION 30%              2 WOMEN 38%
                                                                3   ATOMIC 14%                    3 ASIA PACIFIC 8%              3   SUPPORT FUNCTIONS 13%
                                                                4   PRECOR 12%                                                   4   R&D 10%
                                  6,667 6,553                   5   SUUNTO 8%                                                    5   MARKETING 7%
                                                                6   HEADQUARTERS 1%


                    4,013 4,066                                              6
            3,939
                                                                         5                                 3                                    5
                                                                                                                                            4
                                                                    4                                                                                    1
                                                                                 1                                                                                            2
                                                                                                                                        3
                                                                3                                                     1
                                                                                                     2                                                                                     1
             02      03    04      05    06
                                                                             2                                                                  2




  Performance management at Amer Sports is an on-going                  REWARDING FOR PERFORMANCE                                                   BUILDING FOR THE FUTURE
dialog between the employee and the manager that requires               Much like the products we produce, our mission is to provide                The Amer Sports people strategy is based on our business
regular and constructive feedback as well as a formal annual            our employees with the proper environment and tools to suc-                 strategy and the group’s long-term objectives. We focus on
review process.                                                         ceed and win. We understand that winners will not settle for                creating a strong performance management culture at all
                                                                        second-best and want to be rewarded for their performance.                  levels of the organization, including rewards based on perfor-
PROFESSIONAL GROWTH AND DEVELOPMENT                                       Our reward system is performance-based and supports the                   mance, strong management and leadership competencies,
Our leadership is values-based. We expect our leaders to lead           implementation of our business strategy; we focus on team                   and ensuring that we have the right people in the right places.
by example. We develop leadership talent from within as well            and individual accountability in order to motivate our people to            Through our people strategy, we seek to ensure that our busi-
as acquire experience from outside our family of brands.                set objectives and exceed their personal targets. We actively               ness will be successful today as well as in the future.
    We encourage our people to take a proactive approach to             seek to reward employee performance.
their professional growth and development. We are commit-
ted to continuous development of our senior leaders. We have            GLOBAL AND LOCAL PRESENCE
launched a global executive development program with the                We are represented on every continent and in over 33 coun-
objectives to expand strategic thinking, enable inspirational           tries. Our largest numbers of employees are in the United
leadership and deepen the cohesion within the Amer Sports               States, France, Austria, Canada, Finland, Germany, Japan and
group.                                                                  the UK.
   Furthermore, we recognize the importance of physical well-              We have increased our business presence in Asia and reor-
being and maintaining a balance between work and leisure                ganized our operations in the United States. Our operations
time for a healthy and gratifying personal and professional             are committed to conducting business in the international
life. We provide and support opportunities for learning and             business environment by maintaining a strong local presence
professional growth, and we devote considerable effort to the           and local practices.
development of current and future leaders.
                                                                                                                                                                                                                      51
                                                                                                                                                            PINK RIBBON
                                                                                                                                           Hope is a line of Wilson tennis and
                                                                                                                                                                               golf equipment specially designed
                                                                                                                                           and tailored to suit a woman’s game
                                                                                                                                                                               . A portion of the proceeds benefit
                                                                                                                                          The Breast Cancer Research Foundation
                                                                                                                                                                                    (BCRF) to support their efforts
                                                                                                                                          in breast cancer prevention and resea
                                                                                                                                                                                  rch. All Hope products feature
                                                                                                                                          the BCRF pink ribbon and their packa
                                                                                                                                                                                ging includes information on how
                                                                                                                                          to prevent breast cancer. Wilson has
                                                                                                                                                                                been the Official Sporting Goods
                                                                                                                                          Equipment Sponsor of the BCRF since
                                                                                                                                                                                 1998.




                                                                     We seek to promote healthy lifestyles and sports all around the world.
     SOCIAL RESPONSIBILITY                                           We wish to inspire the world’s youth to discover the fun of exercise, helping
                                                                     them stay healthy and active throughout their lives.



     Amer Sports implements its business strategy in line with its   ENVIRONMENTAL RESPONSIBILITY                                      tally hazardous raw materials. Emissions are minimized, and
     values – in an ethically acceptable and socially responsible    We continuously seek to improve our performance regarding         raw materials and products are recycled as far as possible.
     manner, following the principles of sustainable development.    health, safety, and environmental issues and to reduce the en-       Amer Sports also supports the improvement of working con-
     We believe this is the only way for Amer Sports to succeed in   vironmental impacts of our operations world-wide. In all of our   ditions and seeks to prevent accidents at all of our locations.
     the long run. Today, the sports equipment industry and the      operations and at every single facility, the baseline require-
     consumer expect companies to meet increasingly high stan-       ment is compliance with laws and official regulations and the      SOCIAL RESPONSIBILITY
     dards of social responsibility.                                 observance of generally accepted business standards.              Amer Sports and our business segments also seek to operate
        Each Amer Sports business segment reports to its respec-        All Amer Sports business segments try to foresee their         in a socially responsible manner regarding human rights,
     tive board on the environmental effects of its operations and   environmental impacts and to minimize energy consumption,         working conditions, and child labor, observing current laws,
     on matters of social responsibility.                            waste, and emissions in an economically and technically ratio-    official regulations, and generally accepted principles. The
                                                                     nal manner. We do not use significant amounts of environmen-       Amer Sports principles concerning human rights and working



52
    Photographer Jean-Francois Hagenmuller




conditions are based on international standards defined in           required to monitor the ethics of their suppliers’ operations.   for breast cancer in our lifetime by providing critical funding
ILO (International Labour Organization) Declarations, the UN        The monitoring of these undertakings will be greatly enhanced    for innovative clinical and genetic research at leading medical
Universal Declaration of Human Rights, and the Convention of        when the group’s Asian sourcing is fully consolidated in the     centers world-wide. Annual donations are made through pur-
the Rights of the Child.                                            Hong Kong-based Amer Sports Sourcing Ltd.                        chases of all Wilson products. In addition, Wilson has developed
    Amer Sports aims to engage in business only with compa-                                                                          a line of Hope racket and golf sports equipment and accessories
nies that follow these same principles. Amer Sports business        CHARITY                                                          specifically tailored to suit a women’s game. A portion of the
segments purchase finished products, raw materials, and              Amer Sports supports various charities through its business      proceeds from the Hope line also benefits The BCRF.
components from suppliers with whom long-term partner-              area operations.                                                    Since 1947, mountain sports professionals have contributed
ships are sought. The company’s sourcing personnel review             Amer Sports and LiiKe ry, a Finnish non-governmental           to the development of Salomon footwear, apparel, equipment
all new supplier candidates before any contracts are signed.        organization, are developing sports and education in Tanzania.   and events. To thank them for their contribution, Salomon
Amer Sports chooses only suppliers that comply with gener-          The goal of the cooperation is to develop primary education,     has decided to support them and/or their families in cases of
ally-accepted policies on working conditions and do not exploit     gender equity, health, school attendance and increased           serious personal difficulties (accident, extended illness, death)
child labor.                                                        chances for secondary education through sport in the Mtwara      through the Salomon Foundation, which was created in March
    The standardization of supplier undertakings with regard to     Region of Tanzania. LiiKe will organize Sport, Education and     of 1999.
social responsibility began in 2004 throughout Amer Sports.         Health Days in nearly 600 schools and local areas in Septem-        In 2006, Precor introduced Precor Gives, a self-managed
It is based on parties committing to operating ethically and        ber 2007. Amer Sports will deliver balls for sports activities   corporate philanthropy program in which Precor matches em-
respecting human rights in accordance with internationally-         such as soccer, basketball and volleyball.                       ployee charitable contributions dollar-for-dollar. Additionally,
recognized social and ethical norms. Amer Sports business              Wilson is the Official Sporting Goods Equipment Sponsor of     Precor supports The Austin Foundation, helping the organiza-
segments seek to review all their suppliers at least once per       The Breast Cancer Research Foundation (BCRF), a not-for-profit    tion better serve low-income, disadvantaged or disenfran-
year to ensure they operate ethically. In addition, suppliers are   organization whose mission is to achieve prevention and a cure   chised youth with health and fitness programs.


                                                                                                                                                                                                        53
     BOARD OF DIRECTORS REPORT
     AND FINANCIAL STATEMENTS

     Board of Directors report                        56
     Five-year review                                 63
     Consolidated income statement                    64
     Consolidated balance sheet                       65
     Consolidated cash flow statement                  66
     Consolidated statement of changes
     in shareholders’ equity                          67
     Notes to the consolidated financial statements    68
     Calculation of key indicators                    87
     Parent company’s financial statements             88
     Shares and shareholders                          94
     Board of Directors report’s and financial
     statements’ signatures                          101
     Auditors’ report                                101

     Corporate governance                            102
     Board of Directors                              108
     Executives                                      110
     Information for investors                       112
     Contact information




54
55
                                 BOARD OF DIRECTORS REPORT




                                 On the whole, good trends held sway in the sports equipment                 The Group’s EBIT amounted to EUR 120.2 million (117.1). EBIT          FINANCIAL POSITION AND CASH FLOW
                                 market in 2006. Amer Sports net sales increased 31% due to               in the comparison year was improved by EUR 5.9 million from              The Group’s net debt at the end of the year was EUR 585.4 mil-
                                 Salomon’s inclusion in the full-year figures. Net sales increased         the sale of properties.                                                  lion (December 31, 2005: EUR 601.0 million).
                                 4% as compared to 2005 pro forma figure and was EUR 1,792.7                  Earnings before taxes were EUR 96.6 million (93.1) and net               Cash flow from operating activities after interest and taxes
                                 million (EUR 1,732.0 million in 2005). In this report income             result was EUR 70.5 million (62.4). Earnings per share came              was EUR 45.5 million (96.4). The company’s cash flow from oper-
                                 statement and earnings per share information are compared                in at EUR 0.98 (0.87). Net financing expenses amounted to                 ating activities was reduced by EUR 31.7 million due to payments
                                 to 2005 pro forma figures.                                                EUR 23.6 million (24.0).                                                 associated with the re-structuring of Salomon’s operations in
                                    Net sales by business segment were as follows: Salomon,                  Taxes for the period were EUR 26.1 million (30.7). The                France. Net cash flow from investing activities was EUR –71.9
                                 37%, Wilson, 32%, Precor, 15%, Atomic, 11%, and Suunto, 5%.              company’s taxes were reduced by tax credits received in the              million (–471.6), including the remaining purchase price paid
                                 Salomon’s sales were up 6%. Sales of Salomon apparel and                 United States.                                                           for the acquisition of Salomon, EUR 33.4 million. The dividend
                                 footwear kept climbing fast, up 18%. Precor’s sales grew by 9%                                                                                    payout amounted to EUR 35.9 million (36.0).
                                 and Suunto’s by 13%. Wilson’s sales remained at the previous             CAPITAL EXPENDITURE                                                         Of the EUR 575 million credit facility agreed upon in December
                                 year’s level. Atomic’s net sales were down 4%.                           The Group’s capital expenditure on fixed assets totaled EUR 41.3          2005, EUR 165 million and USD 100 million had been drawn at
                                    Sales of Salomon winter sports equipment and Atomic stayed            million (26.8). The Group’s depreciation was EUR 32.2 million            the end of the financial year, and the committed unused portion
                                 at the previous year’s level. Sales were weakened by the mild            (37.0).                                                                  was EUR 325 million. The credit facility will mature at the end of
                                 fall season.                                                                                                                                      2011. Short-term financing is raised with a domestic commercial
                                    The split of net sales by market area was as follows: the             RESEARCH AND DEVELOPMENT                                                 paper program of EUR 500 million, of which EUR 373.6 million
                                 Americas (the United States, Canada and Latin America) 45%,              EUR 58.5 million (58.6) was invested in research and develop-            had been used as of December 31, 2006.
                                 EMEA (Europe, Middle East, Africa) 44%, and Asia Pacific 11%.             ment, representing 3.3% of net sales. Salomon’s share of the                Liquid assets amounted to EUR 45.5 million at the end of
                                 Sales increased 4% in the Americas, 3% in Asia Pacific and 3%             R&D spend was 42%, while Wilson accounted for 14%, Precor                the period (December 31, 2005: 48.7). The Company’s equity
                                 in EMEA.                                                                 21%, Atomic 10% and Suunto 13%.                                          ratio was 33.6% (December 31, 2005: 31.8%) and gearing was
                                                                                                                                                                                   105% (112%).




                                                     NET SALES                                                             EBIT                                                                      EARNINGS BEFORE TAXES
                                                     EUR million                                                           EUR million                                                               EUR million


                                                                          1,732* 1,793
BOARD OF DIRECTORS REPORT




                                                                                                                                   117.7           117.1* 120.2
                                                                                                                                                                                                             109.5
                                                                                                                           103.0           100.5
                                                                                                                                                                                                      95.6           97.0   93.1* 96.6
                                                      1,102 1,094
                                                                  1,036




                                                       02    03    04      05     06     *)                                 02      03      04      05     06     *)                                   02     03     04     05     06    *)
                                                                                              Pro forma                                                                Pro forma                                                              Pro forma




                            56
BUSINESS SEGMENTS REVIEWS                                              was as follows: Racquet Sports 41%, Team Sports 39%, and                 EUR 11.3 million. Exclusive of the effect of Asics, net sales would
Salomon                                                                Golf 20%. Of net sales, the Americas generated 67%, EMEA 19%             have been at last year’s level. Atomic’s EBIT was EUR 16.6 million
The year 2006 was one of significant changes for Salomon. The           and Asia Pacific 14%. Sales growth was 2% in the Americas.                (22.2). EBIT in Q4 was EUR 14.8 million (19.0).
company completed a major restructuring program in France,             In EMEA sales were at last year’s level. Sales were down 9%
and as a result its personnel will be reduced by 370 people.           in Asia Pacific. Wilson’s EBIT grew by 5% to EUR 54.6 million.            Suunto
Decisions were also taken to lower product costs and create            Its earnings trend was solid in the United States, but the result        Suunto’s net sales grew by 13%. Of net sales, EMEA generated
industrial synergies with Atomic. The integration of Salomon’s         weakened in Japan.                                                       55%, the Americas 33%, and Asia Pacific 12%. Sales increased
sales organization into the Amer Sports global sales and dis-             The Racquet Sports Division continued to perform well. Its            18% in Asia Pacific, 17% in EMEA and 6% in the Americas. Q4
tribution team is proceeding as planned.                               net sales increased 4%. Of the product groups, the best growth           net sales were up 34%. Suunto’s EBIT amounted to EUR 7.0 mil-
   Salomon achieved its objectives for 2006. The profitability of its   was seen in accessories and footwear: footwear, 16% and ac-              lion (3.4). Suunto’s result includes EUR 2.5 million in insurance
winter sports equipment improved, and it racked up significantly        cessories, 14%. Team Sports’ net sales increased 8%. Sales               claims received for the loss of sales margins due to the fire on
higher sales of apparel. Also Mavic’s sales increased. Part of         were up on the corresponding period in all key product groups.           a supplier’s premises in 2005. Sales of wristop computers grew
Salomon’s deliveries slated for September was delayed, rolling         Sales declined only in uniforms and training equipment. The              by 33% during the review period. Sales received a particularly
over from the third to the fourth quarter. This delay was caused       Golf division fell short of its sales objectives, especially in Japan.   strong boost from the good demand for the new Training product
by Salomon’s logistics partner not being able to deliver all the       Demand for golf equipment also declined in Europe. Also the              series. Sales of Suunto’s diving instruments increased 10%,
products to market on schedule.                                        new distribution strategy focusing on the major customers in             largely thanks to the new Suunto D6 wristop computer. Sales
   Salomon’s net sales increased 6%. The breakdown of net              the United States cut into net sales of the Golf Division.               of diving and water sports suits were down. Diving instruments
sales was as follows: Winter Sports Equipment, 52%, Apparel                                                                                     and wristop computers accounted for 72% (66%) of Suunto’s
and Footwear, 32%, and Mavic, 16%. Of net sales, EMEA gener-           Precor                                                                   net sales.
ated 65%, the Americas 24%, and Asia Pacific 11%. Sales were            Precor’s net sales were up 9%. Of net sales, the Americas
up 7% in EMEA, 6% in the Americas and 3% in Asia Pacific.               generated 77%, EMEA 16% and Asia Pacific 7%. Sales were                   AMER SPORTS WINTER & OUTDOOR AMERICAS
Salomon’s EBIT grew to EUR 23.6 million (18.1). The good trend         up 18% in EMEA, 13% in Asia Pacific and 7% in the Americas.               Amer Sports is centralizing its winter and outdoor businesses in
in net sales and improved cost control contributed to the im-          Precor’s EBIT increased 12% to EUR 34.8 million. Non-recur-              North America under single management. This step is geared
provement in Salomon’s earnings. Mavic’s result declined, but          ring quality-related costs weakened earnings by about EUR 2              towards ensuring a more efficient infrastructure for the sales
remained solid.                                                        million. Precor’s sales to fitness clubs continued to soar in             and business operations of Salomon, Atomic and Suunto.
   Net sales of winter sports equipment were at last year’s level.     North America. Precor’s success in the fitness club market
Weak winter conditions early in the 2006/2007 season reduced           was heavily driven by the high demand for the new Experience
the volume of re-orders received by Salomon. Cross-country             aerobic equipment. Products in this series feature personal
skiing experienced the fastest growth of winter sports product         Cardio Theater viewing screens.
groups, with net sales up 19%. Sales of snowboarding equipment
remained at the previous year’s level while sales of alpine skiing     Atomic
equipment decreased 5%. Net sales of apparel and footwear rose         Atomic’s operations did not nearly measure up to expectations
by 18% to EUR 208.0 million. The apparel business posted the           in Q4 2006. Unfavorable weather in all the main winter sports
fastest sales growth, Salomon increased 40% and Arc’teryx 26%.         markets at the end of 2006 reduced the amount of re-orders
Bicycle component manufacturer Mavic’s net sales increased             the company received. During the financial year, Atomic’s net
9% to EUR 107.8 million.                                               sales declined by 4% to EUR 204.8 million. Of net sales, EMEA
                                                                       generated 76%, the Americas 18%, and Asia Pacific 6%. Sales
Wilson                                                                 declined by 13% in Asia Pacific, by 4% in EMEA and by 3% in
Wilson’s net sales remained on a par with the previous year,           the Americas. The distribution of Asics products, a non-core
amounting to EUR 569.6 million. The breakdown of net sales             category for Atomic, ended in Austria, reducing net sales by


                                                                                                                                                                                                                      57
                                 PERSONNEL                                                           sources Inc. announced that its shareholding had declined to       per share. The share subscription period with the warrants
                                 At the end of the year, the Group had 6,553 employees (6,667).      4.99%.                                                             began on January 1, 2007 and ends on December 31, 2009. A
                                 The Group had an average of 6,786 employees (4,968) during the        On December 31, 2006, the Company’s registered share             maximum total of 1,084,950 shares can be subscribed for with
                                 2006 calendar year. The parent company Amer Sports Corpora-         capital totaled EUR 286,790,496 and the total number of shares     the warrants and the share capital can be raised by a maximum
                                 tion had 52 employees (53) at year’s end and an average of 55       was 71,697,624.                                                    of EUR 4,339,800.
                                 (51) during the year.                                                                                                                     At the end of the report year, the Board of Directors had no
                                                                                                     2002 warrant program                                               outstanding authorizations to issue shares.
                                                                  Dec. 31, 2006    Dec. 31, 2005     The highest price of the 2002 warrants on the Helsinki Stock
                                 Salomon                                  2,372            2,607     Exchange was EUR 24.99 and the lowest EUR 13.00. In 2006,          PARENT COMPANY’S BOARD OF DIRECTORS AND AUDITOR
                                 Wilson                                   1,919            1,914     a total of 0.2 million warrants were traded at a total price of    In accordance with the Nomination Committee’s proposal, the
                                 Precor                                     795              733     EUR 3.9 million.                                                   Annual General Meeting held on March 15, 2006 confirmed that
                                 Atomic                                     893              833        15,450 new shares were subscribed for with the 2002 warrants    the number of Amer Sports Corporation’s Board members shall
                                 Suunto                                     522              527     in May-June, 28,950 in June-July, 96,750 in August-September,      be six. Felix Björklund, Ilkka Brotherus, Tuomo Lähdesmäki,
                                 Headquarters                                52               53     20,700 in October and 49,170 in October-November. The in-          Timo Maasilta, Anssi Vanjoki and Roger Talermo (President and
                                 Total                                    6,553            6,667     creases in share capital were entered in the Trade Register as     CEO) were re-elected as members of the Board of Directors until
                                                                                                     follows: EUR 61,800 on July 13, EUR 115,800 on September 7,        the end of the 2007 AGM.
                                   At the end of the year, 1,957 of the Group’s employees worked     EUR 387,000 on October 19, EUR 82,800 on November 24, and             At its first meeting immediately following the AGM, the
                                 in the United States, 1,260 in France, 712 in Austria, 608 in       EUR 196,680 on December 19. As a result of the subscriptions,      Board of Directors elected Anssi Vanjoki as Chairman and
                                 Canada, 393 in Finland and 1,623 in other countries.                the share capital increased EUR 0.8 million.                       Ilkka Brotherus as Vice Chairman. Anssi Vanjoki (Chairman of
                                                                                                        In addition, 358,380 shares were subscribed for in November     the Committee), Felix Björklund and Tuomo Lähdesmäki were
                                 AMER SPORTS’ SHARES AND SHAREHOLDERS                                and 28,500 in December. The increases in share capital were        elected as members of the Remuneration Committee. Ilkka
                                 At the close of the financial year, Amer Sports had 14,351           entered in the Trade Register as follows: EUR 1,433,520 on Janu-   Brotherus (Chairman of the Committee), Timo Maasilta and
                                 registered shareholders. Non-Finnish national owned 56.0%           ary 16, 2007, and EUR 114,000 on February 8, 2007.                 Felix Björklund were elected as members of the Nomination
                                 (54.7%) of the shares.                                                                                                                 Committee. Tuomo Lähdesmäki (Chairman of the Committee),
                                    During the 2006 calendar year, a total of 66.3 million Amer      2003 warrant program                                               Ilkka Brotherus and Timo Maasilta were elected as members
                                 Sports shares were traded on the Helsinki Stock Exchange to a       The highest price of the 2003 warrants on the Helsinki Stock       of the Audit Committee.
                                 total value of EUR 1,115.2 million. The share turnover was 92.6%.   Exchange was EUR 20.99 and the lowest EUR 10.99. In 2006,             The AGM elected Authorized Public Accountants Pricewa-
                                 At the turn of the year, 372,886 ADRs were in circulation.          a total of 0.03 million warrants were traded at a total price of   terhouseCoopers Oy to act as the auditor of the Company. The
                                    At the close of the year on the Helsinki Stock Exchange, the     EUR 0.4 million.                                                   auditor in charge of the audit is Mr Göran Lindell, Authorized
BOARD OF DIRECTORS REPORT




                                 last trade in Amer Sports Corporation shares was completed            In October, 1,494 shares were subscribed for with the 2003       Public Accountant.
                                 at a price of EUR 16.68, representing an increase of 6% during      warrants. The increase in share capital – EUR 5,976 – was en-
                                 the year. The high for the year on the Helsinki Stock Exchange      tered in the Trade Register on December 19.                        BUSINESS RISKS AND UNCERTAINTY FACTORS
                                 was EUR 19.00 and the low EUR 14.75. The average share price                                                                           Amer Sports business is balanced by its broad portfolio of sports
                                 was EUR 16.83.                                                      2004 warrant program                                               and brands as well as its presence in all major markets. For
                                    At year’s end, the Company had a market capitalization of        The warrants of the 2004 warrant program for Amer Sports           example the following risks can potentially have an impact on
                                 EUR 1,195.9 million (1,124.2).                                      Corporation’s key employees were made available for trading        the company’s development:
                                    On January 27, 2006, Franklin Resources Inc. announced           on the Main List of the Helsinki Stock Exchange as of January      • Amer Sports uses steel, rubber and oil-based raw materials
                                 that the total number of shares held by the funds and individual    2, 2007. There are a total of 361,650 warrants. Each warrant en-      and components in its products. Price increases of these
                                 investors under its control represented 5.02% of Amer Sports        titles its bearer to subscribe for three Amer Sports Corporation      materials can have a negative impact on the product cost.
                                 Corporation’s share capital and votes. In March, Franklin Re-       shares. The subscription price with the warrants is EUR 13.53         Amer Sports typically introduces new products every year,


                            58
    which can, depending on the market situation, offset the          OUTLOOK FOR THE FUTURE AND GUIDANCE                                PROPOSED DIVIDEND
    impact of material cost increases.                                Most product groups and markets for sports equipment experi-       Amer Sports seeks to be viewed as a competitive investment
• The United States represents 50% of the world-wide sport-           enced growth in 2006. Following a solid year, it seems that the    that increases shareholder value through a combination of
    ing goods market and 40% of Amer Sports sales. There is           growth in the sports equipment industry will level off in 2007.    dividends and share price performance. The Company therefore
    a correlation between the demand of sporting goods and            The outlook for winter sports is weakened by the warm early        pursues a progressive dividend policy reflecting its results, with
    the development of U.S. retail sales. Therefore, a change         winter in key markets.                                             the objective of distributing a dividend of at least one third of
    in overall U.S. retail sales can have an impact on the Amer          Amer Sports net sales in local currencies is expected to        annual net profits.
    Sports business.                                                  remain at last year’s level in 2007 due to uncertainty caused by      The parent company’s unrestricted shareholders’ equity
• Snow sports represent 30% of Amer Sports sales. Weather             uncommon weather during the 2006/07 winter season. The best        amounts to EUR 266,484,503.73 of which net result for the period
    conditions can have an impact on Amer Sports results. His-        sales growth is anticipated from Suunto, Salomon Apparel and       is EUR 14,953,339.67.
    torically, however, poor snow conditions in one region are        Footwear, and Precor. Sales of Salomon Winter Sports Equip-           The Board of Directors proposes to the Annual General Meet-
    compensated by good snow conditions in another region.            ment and Atomic sales are expected to decline slightly. Wilson’s   ing that the distributable earnings be used as follows:
• A change in the euro’s value vis-a-vis other currencies has         Racquet Sports and Team Sports are forecast to keep growing
    an impact on Amer Sports results. The impact, however, is         steadily, while the primary objective in the Golf Division is to   • A dividend of EUR 0.50 per share, totaling EUR 36,042,252.00,
    limited due to the fact that the company’s euro-U.S. dollar       improve profitability.                                                 to be paid to shareholders
    position is balanced.                                                Amer Sports’ earnings are expected to improve in 2007 thanks    • EUR 230,442,251.73 to be carried forward in unrestricted
• Despite extensive testing of its products before market             to factors such as Salomon’s turnaround initiative in 2006 and        shareholders’ equity
    launch, the company cannot completely rule out the risk that      the synergies between Atomic and Salomon. It is estimated that     Totaling EUR 266,484,503.73
    company can face legal action related to product liability.       Amer Sports’ EBIT will amount to EUR 130–145 million in 2007,
    Amer Sports have standard insurance cover against financial        with earnings per share coming in at EUR 1.10–1.25. Cash flow         There have been no significant changes to the company’s
    consequences of product liability cases. Product liability        from operating activities is expected to improve substantially.    financial position since the close of the financial period. The
    cases could harm Amer Sports reputation and as a result,             Earnings improvements can be expected from Q3 2007 on-          company’s financial standing is good and the proposed dividend
    could have an adverse effect on its sales.                        wards. It is estimated that Amer Sports Q1 2007 result will fall   distribution does not endanger the company’s financial standing,
• Losing a significant client would affect Amer Sports sales.          short of the previous year’s figure. The primary reason behind      according to the Board of Directors.
    However, this risk is limited because the Amer Sports client      this is the below-normal amount of re-orders received for winter
    base is diversified, with the five largest clients accounting for   sports equipment in early 2007.
    less than 10% of the company’s annual sales.
• Amer Sports operates in highly competitive markets where
    the market participants often protect their product innova-
    tions with patents. Consequently, there can be disputes in
    relation to intellectual property rights, which are often heard
    in courts of law.
   The integration of Salomon into Amer Sports and the realiza-
tion of synergies between Salomon and Atomic represent the
company’s biggest challenges for the next two years.
   The Amer Sports risk management policy is described in the
corporate governance section, page 106. The financial risks are
covered in detail in note 26, on pages 85–86.




                                                                                                                                                                                                             59
                                                                                                                     EARNINGS PER SHARE, EUR

                                                                                                                            1.12
                                                                                                                     0.98          0.96           0.98
                                                                                                                                          0.87*
                                 NET SALES BY BUSINESS SEGMENTS
                                                                                           Pro forma
                                 EUR million                            2006         %           2005    Change %
                                 Salomon                               661.4         37         623.5            6
                                 Wilson                                569.6         32         570.4            0
                                 Precor                                275.6         15         252.1            9   02     03     04     05      06     *)
                                                                                                                                                              Pro forma
                                 Atomic                                204.8         11         214.0           –4
                                 Suunto                                 81.3          5           72.0          13
                                 Total                               1,792.7        100       1,732.0            4
                                                                                                                     RETURN ON SHAREHOLDERS’
                                                                                                                     EQUITY, %
                                                                                                                            18.8   18.7

                                                                                                                     15.5                 15.1
                                 EBIT BY BUSINESS SEGMENTS                                                                                        12.9

                                                                                    % of   Pro forma          % of
                                 EUR million                           2006    net sales         2005    net sales
                                 Salomon                               23.6            4          18.1           3
                                 Wilson                                54.6           10          52.1           9
                                 Precor                                34.8           13          31.1          12   02      03    04     05      06
                                 Atomic                                16.6            8          22.2          10
                                 Suunto                                 7.0            9           3.4           5
                                 Headquarters                         –16.4            -          –9.8           -   RETURN ON INVESTMENT, %
                                 Total                                120.2            7        117.1            7
                                                                                                                            19.2
                                                                                                                     17.8          17.2



                                                                                                                                          10.5    11.0
                                 GEOGRAPHIC BREAKDOWN OF NET SALES
                                                                                           Pro forma
                                 EUR million                            2006         %           2005    Change %
                                 Americas                              815.7         45         783.3           4
                                                                                                                      02     03     04     05     06
                                 EMEA                                  781.8         44         758.3           3
                                 Asia Pacific                           195.2         11         190.4           3
BOARD OF DIRECTORS REPORT




                                 Total                               1,792.7        100       1,732.0           4
                                                                                                                     EBIT, % OF NET SALES


                                                                                                                            10.8
                                                                                                                                   9.7
                                                                                                                     9.3


                                                                                                                                          6.8*    6.7




                                                                                                                     02      03    04     05      06     *)
                                                                                                                                                              Pro forma



                            60
EQUITY RATIO, %


                  56

 46        48
                                       PERSONNEL BY BUSINESS SEGMENTS
                         32     34

                                                                                At year end                   Average
                                                                         2006                 2005     2006             2005
                                       Salomon                          2,372                 2,607   2,546               547
 02        03     04     05     06     Wilson                           1,919                 1,914   1,949             2,021
                                       Precor                             795                   733     776               670
                                       Atomic                             893                   833     935               906
                                       Suunto                             522                   527     525               773
GEARING, %                             Headquarters                        52                    53      55                51
                                       Total                            6,553                 6,667   6,786             4,968
                        112
                                105




 47                                    PERSONNEL BY COUNTRY
           33     29                                                             At year end
                                                                         2006              2005
 02       03      04     05     06     USA                              1,957              1,938
                                       France                           1,260              1,602
CAPITAL EXPENDITURE                    Austria                            712                655
EUR MILLION                            Canada                             608                603
                        481.4          Finland                            393                373
                                       Germany                            235                213
192.5                                  Japan                              189                182
                                       UK                                 184                188
                                       Italy                              117                112
                                       Switzerland                         87                 95
                                74.7   Taiwan                              86                 79
                 42.8                  Mexico                              84                101
          30.3
                                       Romania                             71                 77
 02       03      04     05     06     Spain                                                  57
                                                                           62
        Acquisitions                   Australia                           60                 60
        Other
                                       China                               60                 46
PERSONNEL AT YEAR END
                                       Malta                               55                 55
                                       Brazil                              53                 46
                        6,667 6,553
                                       Sweden                              48                 52
                                       Other countries                    232                133
                                       Total                            6,553              6,667
3,939    4,013 4,066




 02        03     04     05     06




                                                                                                                                61
                                 QUARTERLY NET SALES

                                                           I       II      III      IV        I        II       III      IV
                                 EUR million            2006    2006     2006     2006   2005*)   2005*)    2005*)    2005
                                 Salomon               123.3    76.4    179.6    282.1    107.2     71.7     189.4    255.2
                                 Wilson                178.3   159.5    120.3    111.5    172.3    152.3     126.1    119.7
                                 Precor                 72.9    59.3     60.4     83.0     59.0     54.5      57.9     80.7
                                 Atomic                 23.7     5.6     93.3     82.2     26.5      7.8      93.8     85.9
                                 Suunto                 19.2    21.0     18.3     22.8     20.0     18.6      16.4     17.0
                                 Net sales total       417.4   321.8    471.9    581.6    385.0    304.9     483.6    558.5
                                 *)
                                      Pro forma




                                 QUARTERLY EBIT

                                                           I       II     III      IV         I        II       III       IV
                                 EUR million            2006    2006    2006     2006    2005*)   2005*)    2005*)    2005*)
                                 Salomon               –22.4   –17.9    23.6     40.3     –24.5    –23.3      28.0      37.9
                                 Wilson                 24.3    17.2     7.9      5.2      26.1     16.2       6.9       2.9
                                 Precor                 12.0     4.1     6.0     12.7       5.8      4.6       7.1      13.6
                                 Atomic                 –9.4   –12.2    23.4     14.8      –8.4    –12.1      23.7      19.0
                                 Suunto                  1.1     3.7     1.0      1.2       1.7      1.5       0.9      –0.7
                                 Headquarters           –4.0    –3.9    –4.0     –4.5      –3.7      1.9      –3.1      –4.9
                                 EBIT total              1.6    –9.0    57.9     69.7      –3.0    –11.2      63.5      67.8
                                 *)
                                      Pro forma
BOARD OF DIRECTORS REPORT




                            62
FIVE-YEAR REVIEW


                                                                                                                          IFRS                                                                 FAS*)
                   EUR million                                                            2006       Change %              2005               2004              2003                  2003               2002
                   Net sales                                                           1,792.7             31           1,363.7             1,035.9           1,094.1               1,104.4            1,101.9
                   Depreciation                                                           32.2             60              20.1                16.1              19.7                  38.7               34.4
                   Research and development expenses                                      58.5             48              39.4                31.3              30.7                  30.7               23.9
                     % of net sales                                                          3                                3                   3                 3                     3                  2
                   EBIT                                                                  120.2                46           82.3               100.5             117.7                 101.3              103.0
                     % of net sales                                                          7                                6                  10                11                     9                  9
                   Net financing expenses                                                 –23.6               162           –9.0                –3.5              –8.2                  –8.2               –7.4
                     % of net sales                                                          1                                1                                     1                     1                  1
                   Earnings before taxes                                                  96.6                32           73.3                97.0             109.5                  93.1               95.6
                     % of net sales                                                          5                                5                   9                10                     8                  9
                   Taxes                                                                  26.1                             –2.1                28.1              31.0                  28.0               26.5
                   Net result from discontinued operations                                   -                                -                14.0                 -                     -                  -
                   Net result attributable to equity holders of the
                   parent company                                                         70.3                –7           75.2                82.6              78.1                  64.7               68.5
                   Capital expenditure and acquisitions                                   74.7               –84          481.4                42.8              30.3                  30.3              192.5
                      % of net sales                                                          4                              35                   4                 3                     3                 17
                   Divestments                                                             2.8               –71            9.6                34.1               6.2                   6.2               14.7
                   Non-current assets                                                    674.5                –4          700.9               395.6             414.9                 439.2              509.8
                   Inventories                                                           290.4                –4          301.6               154.4             136.9                 136.9              156.4
                   Current receivables                                                   647.1                 2          635.1               260.0             293.6                 309.5              308.2
                   Liquid funds                                                           45.5                –7           48.7                17.0              27.1                  27.1               33.1
                   Non-current assets held for sale                                           -                               -                 3.5                 -                     -                  -
                   Shareholders’ equity and minority interests                           556.1                 4          536.2               461.3             422.5                 472.9              473.4
                   Interest-bearing liabilities                                          630.9                –3          649.7               150.2             167.7                 167.7              243.0
                   Interest-free liabilities                                             470.5                –6          500.4               219.0             282.3                 272.1              291.1
                   Balance sheet total                                                 1,657.5                –2        1,686.3               830.5             872.5                 912.7            1,007.5
                   Return on investment (ROI), %                                          11.0                             10.5                17.2              19.2                  16.7               17.8
                   Return on shareholders’ equity (ROE), %                                12.9                             15.1                18.7              18.8                  14.5               15.5
                   Equity ratio, %                                                           34                              32                  56                48                    50                 46
                   Debt to equity ratio                                                     1.1                             1.2                 0.3               0.4                   0.4                0.5
                   Gearing, %                                                              105                              112                  29                33                    31                 47
                   Average personnel                                                     6,786                37          4,968               4,174             4,089                 4,089              3,827
                   *)
                     The major difference between IFRS and Finnish Accounting Standards (FAS) that has a bearing on earnings is that goodwill and other non-current intangible assets with indefinite useful
                   lives are not amortized on a straight-line basis under IFRS.
                   Calculation of key indicators, see page 87




                                                                                                                                                                                                                 63
                            CONSOLIDATED INCOME STATEMENT (IFRS)                                       CONSOLIDATED INCOME STATEMENT (IFRS),
                                                                                                       COMPARED TO REPORTED LAST YEAR


                                                                                          Pro forma
                            EUR million                                 Note      2006          2005   EUR million                                 Note         2006      2005

                            NET SALES                                           1,792.7      1,732.0   NET SALES                                              1,792.7   1,363.7
                            Cost of goods sold                                 –1,095.3     –1,047.6   Cost of goods sold                               7    –1,095.3    –817.1
                            GROSS PROFIT                                          697.4        684.4   GROSS PROFIT                                             697.4     546.6

                            License income                                        22.4          19.8   License income                                           22.4      16.2
                            Other operating income                                 7.2          11.1   Other operating income                           4        7.2      10.4

                            R&D expenses                                         –58.5        –58.6    R&D expenses                                     7      –58.5     –39.4
                            Selling and marketing expenses                      –416.5       –410.9    Selling and marketing expenses                   7     –416.5    –302.6
                            Administrative and other expenses                   –131.8       –128.7    Administrative and other expenses             7, 8     –131.8     –94.3
                                                                                                       Non-recurring items related to
                            EARNINGS BEFORE INTEREST AND TAXES                   120.2        117.1    the Salomon acquisition                          3           -    –54.6
                            % of net sales                                         6.7          6.8
                                                                                                       EARNINGS BEFORE INTEREST AND TAXES          5, 6, 7     120.2      82.3
                            Financing income and expenses                        –23.6         –24.0   % of net sales                                            6.7       6.0

                            EARNINGS BEFORE TAXES                                 96.6          93.1   Financing income and expenses                    9      –23.6      –9.0

                            Taxes                                                –26.1         –30.7   EARNINGS BEFORE TAXES                                    96.6      73.3

                            NET RESULT                                            70.5          62.4   Taxes                                           10      –26.1        2.1

                            Attributable to:                                                           NET RESULT                                               70.5      75.4
                               Equity holders of the parent company               70.3          62.2
                               Minority interests                                  0.2           0.2   Attributable to:
                                                                                                          Equity holders of the parent company                  70.3      75.2
                            Earnings per share for the net result                                         Minority interests                                     0.2       0.2
                            attributable to the equity holders of the
                            parent company, EUR                           11                           Earnings per share for the net result
                            Undiluted                                             0.98          0.87   attributable to the equity holders of the
                            Diluted                                               0.97          0.86   parent company, EUR                             11
FINANCIAL STATEMENTS




                                                                                                       Undiluted                                                0.98      1.05
                                                                                                       Diluted                                                  0.97      1.04




                       64
CONSOLIDATED BALANCE SHEET (IFRS)



ASSETS                                                                    SHAREHOLDERS’ EQUITY AND LIABILITIES
EUR million                                    Note     2006      2005    EUR million                            Note     2006      2005

NON-CURRENT ASSETS                               12                       SHAREHOLDERS’ EQUITY                     17
  Intangible rights                                    208.5     216.4      Share capital                                286.8     285.9
  Goodwill                                             290.3     311.7      Premium fund                                   6.9       1.3
  Other intangible assets                                1.4       0.7      Translation differences                      –41.5     –14.2
  Land and water                                        14.2      14.2      Fair value and other reserves          25      4.2      –0.6
  Buildings and constructions                           44.2      47.8      Retained earnings                            225.8     185.2
  Machinery and equipment                               52.5      46.5      Net result                                    70.3      75.2
  Other tangible assets                                  1.0       0.8    TOTAL                                          552.5     532.8
  Advances paid and construction in progress             6.9       4.1
  Available-for-sale investments                 13      1.8       2.0    MINORITY INTERESTS                                3.6       3.4
  Deferred tax assets                            14     45.7      53.9
  Other non-current receivables                          8.0       2.8    TOTAL SHAREHOLDERS’ EQUITY                     556.1     536.2
TOTAL NON-CURRENT ASSETS                               674.5     700.9
                                                                          LIABILITIES
CURRENT ASSETS
                                                                          LONG-TERM LIABILITIES
INVENTORIES                                      15                         Loans from financial institutions       18    240.6     249.4
  Raw materials and consumables                         51.7      60.3      Pension loans                          18      1.4       2.5
  Work in progress                                       9.8       9.6      Other interest-bearing liabilities     18      1.9       4.3
  Finished goods                                       228.9     231.7      Deferred tax liabilities               14     13.0      13.8
                                                       290.4     301.6      Other interest-free liabilities                5.7       4.2
                                                                                                                         262.6     274.2
RECEIVABLES
  Accounts receivable                            15    568.7     560.0    CURRENT LIABILITIES
  Loans receivable                                       0.2       0.1      Interest-bearing liabilities           18     387.0     393.5
  Current tax assets                                    12.4       4.9      Accounts payable                              142.9     157.5
  Prepaid expenses and other receivables         16     65.8      70.1      Accrued liabilities                    19     220.1     196.3
                                                       647.1     635.1      Current tax liabilities                        19.4      24.5
                                                                            Provisions                             20      69.4     104.1
LIQUID FUNDS                                     13     45.5      48.7                                                    838.8     875.9
TOTAL CURRENT ASSETS                                   983.0     985.4    TOTAL LIABILITIES                             1,101.4   1,150.1

ASSETS                                                1,657.5   1,686.3   SHAREHOLDERS’ EQUITY AND LIABILITIES          1,657.5   1,686.3




                                                                                                                                            65
                            CONSOLIDATED CASH FLOW STATEMENT (IFRS)


                            EUR million                                                                       Note     2006     2005

                            CASH FLOW FROM OPERATING ACTIVITIES
                               EBIT                                                                                    120.2     82.3
                               Depreciation                                                                             32.2     20.1
                               Adjustments to cash flow from operating activities                                  21     0.6     –1.9
                            Cash flow from operating activities before change in working capital                        153.0    100.5
                               Increase (–) or decrease (+) in inventories                                              –4.9     84.3
                               Increase (–) or decrease (+) in trade and other current receivables                     –39.8   –115.7
                               Increase (+) or decrease (–) in interest-free current liabilities                       –15.4     58.9
                            Change in working capital                                                                  –60.1     27.5
                            Cash flow from operating activities before financing items and taxes                          92.9    128.0
                               Interest paid                                                                           –20.6     –8.9
                               Interest received                                                                         0.8      0.4
                               Income taxes paid                                                                       –27.6    –23.1
                            Financing items and taxes                                                                  –47.4    –31.6
                            Total cash flow from operating activities                                                    45.5     96.4

                            CASH FLOW FROM INVESTING ACTIVITIES
                              Company acquisitions                                                                 3   –33.4   –454.6
                              Capital expenditure                                                                      –41.3    –26.8
                              Proceeds from sale of tangible non-current assets                                          2.8      8.0
                              Proceeds from sale of available-for-sale investments                                         -      1.6
                              Interest received from non-current receivables                                             0.0      0.2
                            Cash flow from investing activities                                                         –71.9   –471.6

                            CASH FLOW FROM FINANCING ACTIVITIES
                              Issue of shares                                                                            6.5      0.7
                              Change in short-term borrowings                                                           41.5    222.1
                              Withdrawals of long-term borrowings                                                          -    254.3
                              Repayments of long-term borrowings                                                        –1.1    –25.9
                              Dividends paid                                                                           –35.9    –36.0
                              Other financing items *)                                                                   13.7     –9.2
                            Cash flow from financing activities                                                           24.7    406.0
FINANCIAL STATEMENTS




                            CHANGE IN LIQUID FUNDS                                                                      –1.7     30.8

                            Liquid funds
                               Liquid funds at year end                                                                 45.5     48.7
                               Translation differences                                                                  –1.5      0.9
                               Liquid funds at year beginning                                                           48.7     17.0
                            Change in liquid funds                                                                      –1.7     30.8
                            *)
                                 Including, for example, cash flow from hedging intercompany balance sheet items
                            The above figures cannot be directly traced from the balance sheet due to acquisitions/divest-
                            ments of subsidiaries and changes in rates of exchange.


                       66
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (IFRS)



                                                                                            Attributable to equity holders of the parent company
                                                                                                                            Fair value                                                Total share-
                                                                                 Share       Premium       Translation      and other      Retained                        Minority       holders’
EUR million                                                                     capital          fund      differences       reserves      earnings           Total       interests          equity
Balance at January 1, 2005                                                        285.7            0.8            –48.4             0.1       219.9           458.1             3.2           461.3
   Translation differences                                                                                         34.2                                        34.2                            34.2
   Cash flow hedges                                                                                                                –0.7                         –0.7                            –0.7
Net income recoqnized directly in equity                                                                          34.2            –0.7                         33.5                            33.5
   Net result                                                                                                                                   75.2           75.2             0.2            75.4
Total recognized income and expense for the period                                                                34.2            –0.7          75.2          108.7             0.2           108.9
   Dividend distribution                                                                                                                       –36.0          –36.0                           –36.0
   Warrants                                                                                                                                      1.3            1.3                             1.3
   Warrants exercised                                                               0.2             0.5                                                         0.7                             0.7
                                                                                    0.2             0.5                                        –34.7          –34.0                           –34.0
Balance at December 31, 2005                                                      285.9             1.3          –14.2            –0.6         260.4          532.8             3.4           536.2
   Translation differences                                                                                       –27.3                                        –27.3                           –27.3
   Cash flow hedges                                                                                                                 4.8                          4.8                             4.8
Net income recoqnized directly in equity                                                                         –27.3             4.8                        –22.5                           –22.5
   Net result                                                                                                                                   70.3           70.3             0.2            70.5
Total recognized income and expense for the period                                                               –27.3             4.8          70.3           47.8             0.2            48.0
   Dividend distribution                                                                                                                       –35.7          –35.7                           –35.7
   Warrants                                                                                                                                      1.1            1.1                             1.1
   Warrants exercised                                                               0.9             5.6                                                         6.5                             6.5
                                                                                    0.9             5.6                                        –34.6          –28.1                           –28.1
Balance at December 31, 2006                                                      286.8             6.9          –41.5             4.2         296.1          552.5             3.6           556.1


Note 17 provides additional information on shareholders’ equity, note 25 on the fair value and other reserves and note 14 on the taxes charged to shareholders’ equity.




                                                                                                                                                                                                      67
                            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



                            1. ACCOUNTING POLICIES                                             capital structure that assumes Salomon had been acquired at            the month, whereby the sum of the twelve calendar months
                                                                                               the beginning of 2005. Pro forma taxes have been assessed in           represents the whole year. Translation differences arising from
                            GENERAL                                                            accordance with ordinary tax rates without the effect of nonre-        the elimination of the acquisition cost of foreign subsidiaries
                            Amer Sports Corporation is a Finnish public listed company that    curring items. Pro forma figures are unaudited.                         are booked to translation differences in consolidated sharehold-
                            is domiciled in Helsinki.                                             On April 20, 2006, the Group published a separate stock ex-         ers’ equity. Inter-company long-term capital loans are treated
                               Amer Sports Corporation and its subsidiaries (“the Group”)      change release on the use of pro forma figures as comparison            similarly. Cumulative translation differences prior to January 1,
                            manufacture, sell and market sports equipment to the sports        information.                                                           2003 are included in retained earnings.
                            equipment trade. The Group’s business is founded on its glob-                                                                               The following exchange rates have been used in the consoli-
                            ally recognized brands – the major brands are Wilson, Salomon,     PRINCIPLES OF CONSOLIDATION                                            dated accounts:
                            Precor, Atomic, Mavic and Suunto.                                  The consolidated financial statements include all subsidiaries
                               The Group has its own operations in 33 countries and its main   in which the parent company holds directly or indirectly more                                 Income statement*)                  Balance sheet
                            market areas are the United States and Europe.                     than half of the votes or otherwise controls as well as affiliated                                 2006      2005                12/06      12/05
                                                                                               companies in which the Group holds 20–50% of the voting rights         USD                        1.26      1.24                 1.32       1.18
                            BASIS OF PREPARATION                                                                                                                      CAD                        1.42      1.51                 1.53       1.37
                                                                                               or in which it otherwise has considerable influence. Companies
                                                                                                                                                                      JPY                      146.00    136.87               156.93     138.90
                            The consolidated financial statements have been prepared in         acquired during the financial year have been included in the
                                                                                                                                                                      GBP                        0.68      0.68                 0.67       0.69
                            accordance with the International Financial Reporting Standards    consolidated financial statements from the date when control
                            (IFRS) approved for use in the EU, observing the standards and     was obtained. Similarly, divested functions are included up to         *)
                                                                                                                                                                           Calculated average for the monthly average rates
                            interpretations in force as at December 31, 2006.                  the date when control has been relinquished.
                               As from January 1, 2006, the Group has applied the revisions       The consolidated financial statements are prepared according            Group companies record transactions in foreign currency at
                            made to IAS 19 (Employee Benefits). This has only affected the      to the historical cost method. The acquisition cost is allocated to    the rate on the transaction date or at an estimated rate suf-
                            presentation of notes, as the Group has not changed its policy     assets, liabilities and contingent liabilities on the basis of their   ficiently close to the rate on the transaction date. Assets and
                            for recognizing actuarial gains and losses.                        fair value at the time of acquisition. The proportion in excess of     liabilities denominated in foreign currencies that are outstanding
                               The changes to IAS 21, IAS 39, IFRS 1, IFRS 4 and IFRS 6 and    the fair value constitutes goodwill. Goodwill is not amortized, but    at the end of the financial year are translated at the average rate
                            to interpretations IFRIC 4, IFRIC 5, IFRIC 6, IFRIC 7, IFRIC 8     its value is measured at least once a year by means of a cash          of exchange in effect at the balance sheet date.
                            and IFRIC 9 that came into force after January 1, 2006, are not    flow-based impairment test (see impairment of assets below).               Foreign exchange gains and losses related to operational
                            material to the Group.                                             Impairment losses are booked to the income statement.                  transactions are treated as adjustments to sales or cost of goods
                               IFRS 7, released in 2005, will be adopted in 2007 once the         Inter-company transactions as well as receivables and li-           sold. Exchange rate gains and losses on foreign currency-de-
                            application of this standard becomes mandatory. This standard      abilities are eliminated. Minority interests are presented as a        nominated loans and other receivables and liabilities connected
                            primarily affects the notes to be disclosed concerning financial    separate item. Minority interests are also shown under share-          with financing transactions are recorded at their net values as
                            instruments.                                                       holders’ equity in the balance sheet.                                  financing income and expenses.
                               The consolidated financial statements are presented in mil-         Affiliated companies are consolidated using the equity method.
                            lions of euros and are based on historical cost conventions with   The Group’s share of the results of affiliated companies is in-         DERIVATIVES AND HEDGE ACCOUNTING
                            the exception of available-for-sale investments, financial assets   cluded in the consolidated income statement. The Group’s share         Derivative instruments used to hedge against currency and inter-
FINANCIAL STATEMENTS




                            and liabilities measured at fair value through profit and loss as   of the post-acquisition accumulated net assets of affiliated com-       est rate risks – such as interest rate swaps, forward contracts
                            well as derivative financial instruments at fair value.             panies is added to the acquisition cost of affiliated companies         and forward rate agreements – are measured at fair value on the
                                                                                               and to retained earnings in the consolidated balance sheet.            day that the Group becomes a party to the contract. Subsequent
                            USE OF PRO FORMA FIGURES                                                                                                                  measurement is also at fair value. Gains and losses from fair
                            In the consolidated financial statements, the income statement      FOREIGN CURRENCIES                                                     value measurement are treated in accordance with the purpose
                            and earnings per share are compared with the pro forma fig-         The assets and liabilities of foreign subsidiaries are translated      of the derivative financial instrument. The fair value of deriva-
                            ures for 2005, in which Salomon has been consolidated as from      into euros at the average rates of exchange confirmed by the            tives is presented in current non-interest-bearing receivables
                            January 1, 2005. The figures do not include non-recurring items     European Central Bank on the balance sheet date. The income            or liabilities.
                            related to the Salomon acquisition. The Group’s pro forma financ-   statement is translated into euros by consolidating each cal-             Changes in the value of derivative instruments not used in
                            ing income and expenses for 2005 have been estimated using a       endar month separately using the actual daily average rate for         hedge accounting are recorded as a credit or charge to earn-


                       68
ings in financing income and expenses. Forward contracts are              Available-for-sale financial assets, such as commercial pa-        RESEARCH AND DEVELOPMENT EXPENSES
measured at fair value using the fixing rates quoted by the Eu-        pers, are measured at their fair value. Changes in fair values       Expenses connected with the technical development and
ropean Central Bank on the closing date. The original interest        are booked as a credit or charge to earnings in financing income      testing of products as well as royalties for the utilization of
rate differential on forward contracts is recorded as a credit or     and expenses. Purchases and sales of investments are entered         non-proprietary manufacturing technology patents are booked
charge to earnings. The fair value of forward rate agreements         in the accounts on the transaction date.                             to research and development expenses. Research and develop-
is based on the market prices quoted on the closing date. The            Held-to-maturity investments and loans granted by the Com-        ment expenses are not capitalized owing, notably, to the short
fair values of interest rate swaps are calculated as the current      pany are carried at amortized cost using the effective interest      life cycle of products.
value of future cash flows. The interest rate differential on inter-   rate method. Current financial assets are valued at cost.
est rate swaps is amortized to profit or loss over the duration           Available-for-sale investments are measured at their fair value   SALES AND MARKETING EXPENSES
of the swaps.                                                         by applying the market prices at the balance sheet date or some      Expenses related to the sales, distribution, marketing and adver-
   Operational cash flows are hedged using forward contracts           other determination of value used by the Company. The change         tising of products are booked to sales and marketing expenses.
when products are purchased or sold in non-local currencies.          in fair value is presented in fair value and other reserves under    These include sales inventory, customer service, marketing and
The interest rate risks of floating-rate loans are hedged with         shareholders’ equity. Fair value changes are transferred from        sales, media advertising expenses and athlete endorsements.
interest rate swaps. The change in the measurement result of          shareholders’ equity to the income statement when the invest-
these financial instruments is recognized in the fair value and        ment is sold or its value has been impaired such that an impair-     ADMINISTRATIVE AND OTHER EXPENSES
other reserves under shareholders’ equity for those hedges            ment loss must be recognized. Available-for-sale investments         Administrative and other expenses encompass Group Head-
which meet the documentation and effectiveness requirements           whose fair value cannot be determined reliably are measured          quarters’ expenses, general administration expenses, as well
set for the application of hedge accounting under IAS 39. The         at cost or a lower value if they are impaired.                       as minor one-off losses such as losses on disposals of non-
cumulative change in gains or losses is transferred to the income        On each closing date, the Group assesses whether there is         current assets.
statement for the period when the hedged item is recorded in          objective evidence for the impairment of a financial asset item
the income statement. If the hedge is not effective, the change       or class. The impairment loss is recorded as a credit or charge      PENSION PLANS
in value in the case of interest rate hedges is recorded in financ-    to earnings in financing items.                                       The Group’s pension arrangements comply with the local rules
ing income and expenses in the income statement and in the                                                                                 and practices of the countries where Amer Sports operates.
case of operating cash flow hedges in other operating income           REVENUE RECOGNITION                                                  Pension expenses based on regularly checked calculations that
and expenses.                                                         Revenue from the sale of goods is booked when significant risks       are prepared by the local authorities or authorized actuaries are
   When initiating hedge accounting, the Group documents the          and rewards connected with ownership of the goods have been          recognized as an expense of the financial period. Under defined
correlation between the hedged item and the hedging instru-           transferred to the purchaser. Net sales represent the invoiced       contribution based plans, such as principally within the Finnish
ments, as well as the Group’s risk management objective and           value of goods, less value added taxes as well as discounts and      TEL employment pension system, the Group’s contributions are
hedge initiation strategy. The Group documents and evaluates          adding or subtracting foreign exchange differences.                  recorded as an expense in the period to which they relate. In
the effectiveness of hedges when initiating hedging and on a             Revenue obtained from other companies is booked to license        defined benefit plans, pension expenses are recognized in the
quarterly basis by examining the degree to which the hedging          income when these companies manufacture or sell products             income statement, periodizing the regular costs for the employ-
instrument offsets changes in the fair value and cash flow of          bearing the Amer Sports trademarks. In addition, license in-         ee’s years of employment according to annual pension actuarial
the hedged item.                                                      come includes royalty payments obtained from other companies         computations, applying the projected unit credit method. The
   The Group does not hedge the net investment in an indepen-         when they utilize manufacturing technology patents owned by          pension liability is obtained by calculating the present value of
dent foreign unit with derivatives.                                   the Group.                                                           future pension contributions, applying the rate on long govern-
                                                                         Other operating income comprises rental income, gains on          ment treasury bills or similar instruments as the discount rate.
MEASUREMENT OF FINANCIAL ASSETS                                       the sale of non-current assets as well as other non-recurring        Actuarial gains and losses are recognized in the income state-
In accordance with IAS 19: Financial Instruments: Recognition         income, such as patent settlements.                                  ment for the employees’ average remaining period of service
and Measurement, financial assets are categorized in:                                                                                       to the extent that they exceed the greater of 10% of the defined
I. financial assets at fair value through profit or loss                COST OF GOODS SOLD                                                   benefit obligation or 10% of the fair value of plan assets.
II. held-to-maturity investments                                      The cost of goods sold includes all the salary and wage, material,
III. loans and receivables                                            procurement and other costs connected with the manufacture
IV. available-for-sale financial assets                                and purchase of products.


                                                                                                                                                                                                               69
                            SHARE-BASED PAYMENT                                                 porary differences between the book and tax base of assets in         Depreciation is calculated on a straight-line basis in order
                            The warrants granted to key employees of the Group are mea-         accordance with the tax rate at the balance sheet date or with      to write off the cost of the tangible assets over their expected
                            sured at fair value at the time of granting using generally ac-     the future tax rates prevailing when the tax is estimated to be     useful lives, adjusting for any impairment. The depreciation
                            cepted warrant valuation models. The fair values of warrants        paid. Temporary differences arise from factors such as unused       periods are:
                            are periodized as expenses in the income statement in even          tax losses, depreciation differences, provisions, defined benefit
                            installments over the vesting period of the rights. The expense     pension plans, the fair valuation of derivative financial instru-      Buildings                                          25–40 years
                            determined at the time of granting the warrants is based on an      ments, the internal inventory margin as well as measurements          Machinery and equipment                             3–10 years
                            estimate of the number of warrants that it is believed will vest    to fair value of assets in connection with acquisitions of busi-
                            at the end of the vesting period. The contra item in the balance    nesses. The tax effect of undistributed earnings of subsidiaries      Land is not depreciated.
                            sheet is retained earnings. The Group updates its estimate of       is recorded as a deferred tax liability if a dividend payout is
                            the final number of warrants on each closing date. Changes in        probable and it will result in tax consequences. A deferred tax     IMPAIRMENT OF ASSETS
                            the estimates are recognized in the income statement.               asset is recognized as a result of unused tax losses and other      The carrying amounts of non-current tangible and intangible
                               The cash payments based on exercise of the option warrants       temporary differences to the extent that it is probable that they   assets are assessed by means of impairment tests whenever
                            are entered in the Company’s share capital and share premium        can be utilized in future financial periods.                         there is an indication of impairment. Any impairment of goodwill
                            fund.                                                                                                                                   and other intangible rights having an indefinite useful life are
                                                                                                EARNINGS PER SHARE                                                  nevertheless assessed at least once a year.
                            NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED                   The undiluted earnings per share are calculated by dividing the        Impairment tests involve measuring the recoverable amount
                            OPERATIONS                                                          net result for the financial year by the weighted average num-       of said asset. The recoverable amount is the higher of the asset’s
                            A non-current asset is categorized as held for sale when the        ber of shares outstanding during the financial year. The dilutive    net selling price or cash flow-based value in use. An impairment
                            economic benefits gained from it will be accrued primarily from      effect of warrants is taken into account in calculating diluted     loss is recognized in the income statement when the carrying
                            its sale rather than continuous use. Non-current assets held        earnings per share.                                                 amount of an asset is greater than the recoverable amount.
                            for sale are measured at the lower of carrying amount or fair                                                                           Impairment recognized on other assets than goodwill is reversed
                            value less selling costs and disclosed on a separate line in the    GOVERNMENT GRANTS                                                   if a change occurs in the estimates leading to the impairment
                            balance sheet. These assets are not depreciated.                    Government grants received are entered as adjustments to            charge. An impairment loss is reversed to a maximum amount
                               Discontinued operations comprise a significant part of the        expenses in the result for the financial period except when they     that does not exceed the carrying amount of the asset if an
                            Company (such as a segment) that it has decided to discontinue.     relate to investments, in which case they are deducted from         impairment would not have been originally recognized.
                            The net result of discontinued operations is disclosed on its       the cost.                                                              The recoverable amount of goodwill and intangible rights with
                            own line in the income statement, separately from continuing                                                                            indefinite useful lives is always determined via their cash flow-
                            operations.                                                         INTANGIBLE RIGHTS AND OTHER INTANGIBLE NON-CURRENT                  based values in use. The future cash flows used in impairment
                                                                                                ASSETS                                                              calculations are based on budgets and strategic plans for the
                            BORROWING COSTS                                                     Intangible rights comprise trademarks and patents; software         next three years as approved by the Group’s Board of Direc-
                            Borrowing costs are recognized as an accrual-based expense.         licenses, for instance, are included in other intangible assets.    tors. The cash flow for subsequent years has been estimated
                            The transaction costs of borrowing are included in the periodized   Patents and software licenses are recognized in the balance         conservatively based on the growth assumptions made in the
FINANCIAL STATEMENTS




                            initial cost and are periodized as interest expenses using the      sheet at cost and amortized on a straight-line basis during an      three-year plans.
                            effective interest method.                                          expected useful life of from three to fifteen years. Trademarks         In the cash flow-based impairment calculations for other
                                                                                                with indefinite useful lives are not amortized, but an annual        intangible rights and property, plant and equipment, only the
                            INCOME TAXES                                                        cash flow-based impairment test is carried out on them (see          cash flows for the next five years are recognized, of which the
                            Taxes include the taxes for the financial year calculated on         impairment of assets below).                                        first three are based on the budgets and strategic plans for the
                            the basis of the result for the period or dividend paid out and                                                                         next three years as approved by the Group’s Board of Directors.
                            in accordance with the tax legislation of each company’s local      TANGIBLE NON-CURRENT ASSETS                                         In the calculations, the fourth and fifth years are estimated
                            domicile as well as assessed or returned taxes for previous         Tangible non-current assets are stated as the difference between    conservatively according to the growth assumptions made in the
                            financial periods and the change in deferred taxes.                  the initial costs and accumulated depreciation less any impair-     three-year plans. The residual values used in the calculations are
                               Deferred tax assets and liabilities are calculated on all tem-   ment losses (see impairment of assets below).                       estimates of the probable net selling prices of the asset items.


                       70
   The discount rate in the calculations is based on the long-term   FINANCIAL LIABILITIES
risk-free market interest rate and a generally used standard         Financial liabilities are initially carried at fair value. Transaction
risk premium.                                                        costs are included in the original carrying amount of financial
                                                                     liabilities. All financial liabilities are subsequently carried at
INVESTMENT PROPERTIES                                                amortized cost using the effective interest rate method. Used
Investment properties are real estate that is held because of        revolving credit facilities are included in current interest-bear-
rental income or an appreciation in the property value. Invest-      ing liabilities.
ment properties are measured at cost. The Group does not have
major assets that are classified as investment properties.            PROVISIONS
                                                                     Obligations arising as the consequence of a past event, which are
LEASING                                                              legal or which the Company has an obligation to settle and are
Lease agreements relating to tangible assets, in which the           considered certain or likely to occur, are booked in the income
Group bears an essential part of the ownership risks and re-         statement under an appropriate expense heading. They are
wards, are classified as finance lease agreements. A finance            presented in the balance sheet as provisions when it is probable
lease agreement is entered in the balance sheet at the lower         that the resources will be transferred out of the Group but the
of the asset’s fair value or the present value of minimum lease      precise amount or timing is not known. In other cases they are
payments, and it is amortized. Lease obligations are included        presented as accrued liabilities. The most important regular
in interest-bearing liabilities. The Group does not have major       provisions are due to the repair or replacement of products
finance lease agreements. Other leasing payments are treated          during the warranty period. These provisions are determined on
as rental expenses.                                                  the basis of historical experience. A provision for reorganization
                                                                     is made when the Group has drawn up a detailed reorganization
INVENTORIES                                                          plan and announced the reorganization.
Inventories are measured at the lower of cost calculated accord-
ing to the FIFO principle or the net realizable value. For self-     USE OF ESTIMATES IN THE FINANCIAL STATEMENTS
manufactured products, the cost includes direct wage and raw         When preparing the financial statements, the Group’s manage-
materials costs for the manufacture of the products as well as a     ment has to make estimates and assumptions influencing the
portion of the indirect costs of manufacture. Net realizable value   content of the financial statements and it must exercise its
is the estimated selling price in the ordinary course of business    judgment regarding the application of accounting policies. The
less the estimated costs of completion and the estimated costs       most important of these estimates and assumptions are related
necessary to make the sale.                                          to any impairment of goodwill and other asset items as well as
                                                                     provisions. Actual results may differ from these estimates.
ACCOUNTS RECEIVABLE
Accounts receivable are carried at the original invoiced amount
less impairment losses and credits for returns. Impairment
losses are recognized case by case and on the basis of historical
experience when there is evidence that the receivable cannot
be recovered in full, such as due to the payment difficulties or
impending bankruptcy of the debtor.

LIQUID FUNDS
Liquid funds comprise cash in hand and deposits held at call
with banks as well as other liquid funds such as marketable
securities.


                                                                                                                                              71
                            2. SEGMENT INFORMATION

                            The Group’s primary form of segment reporting is according to the business segments. The busi-         capital employed of the business segments is the 12-month average and it includes only capital
                            ness segments are based on the Group’s organizational structure and reporting. They were revised       employed items directly connected to the business, excluding Group goodwill amounts.
                            on January 1, 2006, and the redefined business segments are Salomon, Wilson, Precor, Atomic                The Group’s geographical segments are the Americas, EMEA (Europe, the Middle East and Africa)
                            and Suunto. There were no intersegment business operations in 2005 and 2006.                           and Asia Pacific (including Japan and Australia). The definition of these areas is based on their
                              The assets and liabilities of the business segments include only items directly connected to the     geographical risks as well as the organization of the Group’s sales operations. The net sales of
                            business as well as the goodwill related to them. Unallocated items, including Group Headquarters,     the geographical segments are presented according to customers’ location and assets according
                            include tax and finanging items as well as items allocated to the Company as a whole. The average       to where the assets are located. Goodwill is not allocated to the geographical areas.


                            BUSINESS SEGMENTS
                                                                                                                                                                                       Business
                            2006                                                                                                                                                      segments       Unallocated
                            EUR million                                                                    Salomon           Wilson         Precor          Atomic        Suunto           total           items             Total
                            Net sales                                                                          661.4          569.6          275.6            204.8         81.3         1,792.7                -          1,792.7
                            EBIT                                                                                23.6            54.6          34.8             16.6          7.0           136.6            –16.4            120.2
                              % of net sales                                                                     3.6             9.6          12.6              8.1          8.6             7.6                -              6.7

                            Average capital employed                                                           210.2             142.2         68.9           100.7          22.8          544.8            459.4          1,004.2
                            ROCE, %                                                                             11.2              38.4         50.6            16.5          30.9           25.1                -             12.0

                            Goodwill and non-current intangible assets with indefinite useful lives             178.0             102.1       149.8             13.5          29.2           472.6               -            472.6
                            Other assets                                                                       522.3             221.9       109.8            180.6          36.2         1,070.8           114.1          1,184.9
                            Liabilities                                                                        210.8             106.1        53.4             51.2          13.5           435.0           666.4          1,101.4
                            Capital expenditure                                                                 16.6               8.1         5.2              9.4           1.6            40.9             0.4             41.3
                            Depreciation                                                                        15.8               4.2         4.0              5.8           1.6            31.4             0.8             32.2
                            Cash flow from operating activities before financing items and taxes                   4.1              47.4        29.3             22.5           5.7           109.0           –16.1             92.9

                                                                                                                                                                                       Business
                            2005                                                                                                                                                      segments       Unallocated
                            EUR million                                                                    Salomon           Wilson         Precor          Atomic        Suunto           total           items             Total
                            Net sales                                                                          255.2          570.4          252.1            214.0         72.0         1,363.7                -          1,363.7
                            EBIT                                                                               –16.7            52.1          31.1             22.2          3.4            92.1             –9.8             82.3
                              % of net sales                                                                       -             9.1          12.3             10.4          4.7             6.8                -              6.0

                            Average capital employed                                                            72.6             141.2         60.8           107.9          22.9          405.4            322.8            728.2
FINANCIAL STATEMENTS




                            ROCE, %                                                                            –23.0              36.9         51.2            20.6          14.8           22.7                -             11.3

                            Goodwill and non-current intangible assets with indefinite useful lives             181.8             114.0       156.9             13.5          29.1           495.3               -            495.3
                            Other assets                                                                       512.0             229.2        96.1            177.8          29.9         1,045.0           146.0          1,191.0
                            Liabilities                                                                        238.9             114.1        49.6             48.8           9.3           460.7           689.4          1,150.1
                            Capital expenditure                                                                  8.0               3.7         3.9              9.5           1.4            26.5             0.3             26.8
                            Depreciation                                                                         3.9               4.2         3.5              6.0           1.7            19.3             0.8             20.1
                            Impairment losses                                                                      -               1.7           -                -             -             1.7               -              1.7
                            Provision for restructuring                                                         52.8               3.0           -                -             -            55.8               -             55.8
                            Cash flow from operating activities before financing items and taxes                  32.0              50.4        29.4             23.2           6.5           141.5           –13.5            128.0



                       72
GEOGRAPHICAL SEGMENTS

2006                                                                    Unallocated
EUR million             Americas   EMEA     Asia Pacific   Elimination         items     Total
External net sales         815.7    781.8         195.2             -             -   1,792.7

Assets                     406.4   667.6           71.8       –158.6          670.3   1,657.5
Capital expenditure         14.8    25.7            0.8            -              -      41.3

2005                                                                    Unallocated
EUR million             Americas   EMEA     Asia Pacific   Elimination         items     Total
External net sales         679.9    521.0         162.8             -             -   1,363.7

Assets                     430.6   607.0           75.5         –88.8         662.0   1,686.3
Capital expenditure          6.5    18.9            1.1             -           0.3      26.8




                                                                                                73
                            3. ACQUIRED BUSINESSES

                            There were no significant business acquisitions in 2006. The                Salomon has been consolidated into the Group’s financial                 Salomon, Mavic and Arc’teryx, and EUR 28.5 million to patented
                            remaining purchase price paid to adidas-Salomon AG in Febru-            figures as of October 1, 2005. Salomon’s full-year pro forma net            manufacturing technologies. Allocations of the acquisition cost to
                            ary 2006 for the Salomon acquisition plus the paid professional         sales for 2005 amounted to EUR 623.5 million and EBIT exclusive            other intangible assets were not made. The acquisition generated
                            fees amounted to EUR 33.4 million.                                      of non-recurring items to EUR 18.1 million. Amer Sports full-              EUR 55.4 million in negative goodwill, which was recognized as
                              In October 2005, the Group expanded substantially when it             year pro forma net sales amounted to EUR 1,732.0 million and               income in the 2005 financial period. The negative goodwill was
                            acquired the businesses and brands of Salomon from adidas-              EBIT excluding non-recurring items related to Salomon was                  due to the weak development of Salomon’s winter sports busi-
                            Salomon AG:                                                             EUR 117.1 million.                                                         ness in recent years. A reorganization program was introduced
                            – Salomon: winter sports equipment (alpine skiing, cross-country           The debt-free purchase price was EUR 496.9 million, of which            to improve the profitability in this line of business, thus a restruc-
                              skiing and snowboarding), inline skates, footwear and apparel         EUR 460.0 million was paid by the end of 2005. Professional                turing provision of EUR 52.8 million was recognized in the 2005
                            – Mavic: bicycle components                                             fees associated with the acquisition were EUR 5.8 million. The             financial period. The recognition of the difference between the
                            – Bonfire: snowboard apparel                                             acquisition was financed with debt.                                         fair value and initial cost of the purchased inventories reduced
                            – Arc’teryx: technical outwear                                             The fair value of acquired net assets was EUR 530.9 million,            EBIT by EUR 57.2 million.
                            – Cliché: skateboard equipment and apparel                              of which EUR 179.6 million was allocated to the trademarks of



                            The following assets and liabilities have been booked for the acquired businesses:                        Impact of the Salomon acquisition on the Group’s net result in 2005:
                                                                             Net fair values of              Assets and liabilities                                                               Salomon’s Non-recurring
                                                                            identifiable assets               immediately before                                                                    business items related to
                                                                           and liabilities of the               the business          EUR million                                                 operations the acquisition             Total
                                                                           acquired businesses                  combinations          Net sales                                                        255.2               -             255.2
                            EUR million                                   2006              2005             2006            2005       Recognition of negative goodwill gener-
                            Intangible non-current assets                     -             211.0                -              5.2     ated in the acquisition *)                                           -                55.4
                            Tangible non-current assets                       -              17.8                -            57.6      Recognition of the difference between
                            Deferred tax assets                               -              37.8                -            17.9      fair value and initial cost of purchased
                            Inventories                                       -             271.5                -          221.7       inventories *)                                                      -                –57.2
                            Receivables                                       -             234.1                -          234.1       Provision for reorganization *)                                     -                –52.8
                            Cash and cash equivalents                         -              10.3                -            10.3    EBIT                                                               37.9                –54.6       –16.7
                            Total assets                                      -             782.5                -          546.8       Net financing expenses                                            –4.5                    -        –4.5
                                                                                                                                      EBT                                                                33.4                –54.6       –21.2
                            Interest-bearing liabilities                      -            37.5                  -            37.5      Current and deferred taxes                                      –11.7                 38.5        26.8
                            Deferred tax liabilities                          -            33.0                  -             0.0    Net result                                                         21.7                –16.1         5.6
                            Other interest-free liabilities                   -           181.1                  -           173.8    *)
                                                                                                                                           Non-recurring items related to the Salomon acquisition in the Group’s income statement
                            Total liabilities                                 -           251.6                  -           211.3
                                                                                                                                      Recognition of negative goodwill as income has no impact on deferred taxes.

                            Net assets                                        -           530.9                  -           335.5
FINANCIAL STATEMENTS




                            Debt-free purchase price                          -           496.9
                            Professional fees                                 -             5.8
                            Net debt                                          -           –27.2
                            Acquisition cost                                  -           475.5
                            Negative goodwill                                 -           –55.4

                            Purchase price and professional fees
                            paid in cash                                   33.4           464.9
                            Cash and cash equivalents of acquired
                            businesses                                        -            10.3
                            Acquisition cost in cash flow statement         33.4           454.6

                       74
4. OTHER OPERATING INCOME                                                                            6. PENSIONS

EUR million                                                               2006              2005     Pension security for Group companies is based on each country’s local regulations and practices.
Rental return on real estate                                               0.5                0.6    The Group’s most significant defined benefit pension plan is for Wilson Sporting Goods Co. in USA.
Gain on sale of non-current assets                                         0.5                6.8    Other countries where the Group has defined benefit plans include Switzerland, UK and Finland.
Other                                                                      6.2                3.0    These are handled via pension funds or pension companies whose assets are not included in
Total                                                                      7.2               10.4    the Group’s assets. Contributions to the funds are made in accordance with local regulations. In
                                                                                                     USA and UK pension funds are closed, and new members are no longer admitted to them. The
In 2005, a factory property and related company housing in Hyrylä, Finland were sold at a price of   Group’s other pension arrangements, such as the Finnish TEL statutory employment pension,
EUR 7.0 million. A pre-tax gain of EUR 5.9 million was recognized on the transaction.                are mainly defined contribution plans.

5. EMPLOYEE BENEFITS AND RELATED PARTY TRANSACTIONS                                                  The net liability recognized in the balance sheet relating to defined benefit pension plans is
                                                                                                     defined as follows:
EUR million                                                               2006              2005     EUR million                                                           2006                 2005
Wages and salaries                                                       286.6              189.0    Present value of funded obligations                                                         91.0
                                                                                                                                                                           86.4
Social expenditure                                                                                   Fair value of plan assets                                                                  –82.5
                                                                                                                                                                          –84.9
   Pensions - defined contribution plans                                    6.9                2.0    Deficit/(surplus)                                                                             8.5
                                                                                                                                                                            1.5
   Pensions - defined benefit plans                                          0.8                2.9    Unrecognized actuarial gains (–) and losses (+)                                             –3.3
                                                                                                                                                                            1.3
   Other social security                                                  58.9               42.0    Net liability in the balance sheet                                                           5.2
                                                                                                                                                                            2.8
Total                                                                    353.2              235.9
                                                                                                     Movements in the net liability recognized in the balance sheet:
In countries where social expenditure paid to society cannot be divided between pensions and other
                                                                                                     EUR million                                                           2006                 2005
social security, the expenses are presented under the heading Other social security.
                                                                                                     Net liability at January 1                                             5.2                   9.1
                                                                                                     Expense recognized in the income statement                             0.8                   2.9
Related parties include the parent company, subsidiaries (note 24), the Board of Directors and
                                                                                                     Contributions paid                                                    –3.4                  –7.5
the Amer Sports Executive Board.
                                                                                                     Acquired subsidiaries                                                    -                   0.3
                                                                                                     Translation differences                                                0.2                   0.4
Salaries and remuneration of the Board of Directors and the
                                                                                                     Net liability at December 31                                           2.8                   5.2
Amer Sports Executive Board                                                 4.9               5.1
of which the salaries and remuneration of the Executive Board               4.7               4.9
                                                                                                     Amounts recognized in the income statement:
                                                                                                     EUR million                                                           2006                 2005
With the exception of the President, members of the Board of Directors do not have contractual
                                                                                                     Current service cost                                                   2.1                   2.3
retirement benefits with the Company. In addition to the President, two Finnish members of the
                                                                                                     Interest cost                                                          4.3                   4.9
Amer Sports Executive Board have early retirement rights. No loans have been granted to the
                                                                                                     Expected return on plan assets                                        –5.7                  –5.3
Group’s Board of Directors and management.
                                                                                                     Recognised actuarial gains (–) and losses (+)                          0.1                  –0.5
  Salaries and other compensation of the Board of Directors and management are presented in          Past service cost                                                                            1.5
                                                                                                                                                                            0.0
more detail on pages 105–107 under the section “Salaries and other compensation”.                    Total, included in personnel expenses                                                        2.9
                                                                                                                                                                            0.8

                                                                                                     The actual return on plan assets                                        7.8                  5.7




                                                                                                                                                                                                        75
                            Movements in the present value of obligations:                                                    7. DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES
                            EUR million                                                             2006              2005
                            Present value of obligations at January 1                               91.0               72.8   DEPRECIATION AND AMORTIZATION BY ASSET TYPE
                            Current service cost                                                     2.1                3.8
                            Interest cost                                                            4.3                4.9   EUR million                                                                2006              2005
                            Recognised actuarial gains (–) and losses (+)                           –2.0                1.1   Intangible rights                                                          10.0                3.5
                            Acquired subsidiaries                                                    0.0                4.0   Other intangible assets                                                     0.2                0.2
                            Translation differences                                                 –6.1                8.0   Buildings and constructions                                                 4.3                3.6
                            Benefits paid                                                            –2.9               –3.6   Machinery and equipment                                                    17.7               12.8
                            Present value of obligations at December 31                             86.4               91.0   Total                                                                      32.2               20.1

                            Movements in the fair value of plan assets:                                                       IMPAIRMENT LOSSES BY ASSET TYPE
                            EUR million                                                             2006              2005
                            Fair value of plan assets at January 1                                  82.5               60.8   EUR million                                                                2006              2005
                            Expected return on plan assets                                           5.7                5.3   Buildings and constructions                                                   -                1.1
                            Recognised actuarial gains (–) and losses (+)                            2.1                1.2   Machinery and equipment                                                       -                0.6
                            Contributions paid                                                       3.4                7.5   Total                                                                         -                1.7
                            Acquired subsidiaries                                                      -                3.7
                            Translation differences                                                 –5.9                7.6   Impairment in 2005 is wholly related to the Golf Division’s production plant in the United
                            Benefits paid                                                            –2.9               –3.6   States. The impairment has been booked as other expenses.
                            Fair value of plan assets at December 31                                84.9               82.5
                                                                                                                              DEPRECIATION, AMORTIZATION AND IMPAIRMENT LOSSES BY FUNCTION

                            Major categories of plan assets as a percentage of total plan assets:
                                                                                                                              EUR million                                                                2006              2005
                            %                                                                       2006              2005
                                                                                                                              Cost of goods sold                                                         11.9                8.6
                            Equity                                                                    64                67
                                                                                                                              Research and development                                                    2.4                3.9
                            Bonds                                                                     32                29
                                                                                                                              Selling and marketing                                                       2.6                2.3
                            Other                                                                      4                 4
                                                                                                                              Administration and other expenses                                          15.3                7.0
                            Total                                                                    100               100
                                                                                                                              Total                                                                      32.2               21.8
                            Principal actuarial assumptions:
                                                                                                                              Impairment tests of goodwill and other intangible rights with indefinite useful lives, such as
                                                                                    2006                     2005             trademarks, are performed in the last quarter of the year. Tests are carried out at the business
                            %                                                     USA       Europe         USA      Europe
                                                                                                                              area level. Tests are based on the value in use calculations with following assumptions. In con-
                            Discount rate                                          6.1      3.0–5.1         5.5     3.0–5.3
                                                                                                                              nection with budgeting, three-year business plans are prepared. The growth assumption of each
                            Expected return on plan assets                         8.0      2.5–7.3         8.0     2.5–5.4
FINANCIAL STATEMENTS




                                                                                                                              business is based on the market and competition conditions prevailing in that business area. After
                            Future salary increases                                4.5      1.0–3.4         4.5     1.0–4.0
                                                                                                                              three years, growth is assumed to be one half of the budgeted growth. All business areas operate
                            Future pension increases                               4.0      0.0–2.3         4.0     0.0–2.1
                                                                                                                              in global markets. For this reason, the same discount rate has been used for all business areas,
                                                                                                                              where the interest rate for liabilities has been calculated as the weighted average of the interest
                            Amounts for the current period and previous year:                                                 rates of the Group’s key currencies. In 2006, the discount rate before taxes was 9.1% (10.0%). In
                            EUR million                                                             2006              2005    2006, the value in use of goodwill and other intangible rights with indefinite useful lives, such as
                            Present value of obligations                                            86.4               91.0   trademarks, of all independent cash generating units clearly exceeded their carrying amount.
                            Fair value of plan assets                                               84.9               82.5   Based on the management view, no foreseeable change in the assumptions will cause an impair-
                            Surplus(+)/Deficit(–)                                                    –1.5               –8.5   ment risk in any of the independent cash generating units.
                            Experience adjustments on plan assets                                    2.2               –1.6

                            The Group expects to contribute EUR 0.8 million to its defined benefit pension plans in 2007.

                       76
  Brands owned by Amer Sports are well known and established in their respective areas. Products    EUR million                                                                  2006          2005
sold under these brands have been available to customers for a long period (Salomon 60 years,       Expense of warrant schemes recognized in earnings                              1.1           1.3
Mavic over 100 years) and used by top athletes for decades. Amer Sports strongly focuses on brand
awareness and on the quality and performance of the products. The brands create positive cash       Inputs to pricing model:
flow and thus describing their useful lives as indefinite is justified.                                                                                                        Warrant scheme
                                                                                                                                                              2006 2005       2004:1       2004:2
The Group’s goodwill and non-current intangible assets with indefinite useful lives are              Grant date                                                   -    - Apr. 28, 2004 Feb. 3, 2005
allocated to the following businesses:                                                              Number of warrants granted                                   -    -      147,001      114,649
                                                                                                    Share price at grant date, EUR                               -    -         13.57        13.80
                                                   2006                        2005                 Exercise price, EUR                                          -    -         13.53        13.53
                                                      Non-current                 Non-current       Vesting period, years                                        -    -           5.7          4.9
                                                        intangible                  intangible      Expected volatility                                          -    -            32           30
EUR million                                  Goodwill       assets       Goodwill       assets      Expected dividends                                           -    -          3.44         3.62
Salomon                                             -        146.1              -        149.0      Risk-free interest rate                                      -    -          3.57         3.10
Mavic                                               -         23.3              -         23.3      Departure rate                                               -    -             0            0
Arc’teryx                                           -          8.6              -          9.5      Fair value per warrant at grant date, EUR                    -    –         10.54         9.39
Racquet Sports                                   58.4            -           65.0            -
Team Sports                                      43.7            -           49.0            -      Following the 1:2 bonus issue in December 2004, one warrant entitles its bearer to subscribe
Precor                                          147.3          2.5          156.9            -      for three shares.
Atomic                                           11.7          1.8           11.7          1.8
Suunto                                           29.2            -           29.1            -      The expected volatility has been estimated using the daily data on rates during the three years
Total                                           290.3        182.3          311.7        183.6      preceding the issue.




8. SHARE-BASED PAYMENT                                                                                                                                  2006                       2005
                                                                                                                                                  Weighted                    Weighted
Fair values of warrant schemes granted after November 7, 2002 have been expensed to the                                                             average    Number of        average Number of
                                                                                                                                                   exercise      warrants      exercise   warrants
Group’s income statement in accordance with IFRS 2 (Share-based Payment). Fair values of war-
                                                                                                                                                 price, EUR    (1,000 pcs)   price, EUR (1,000 pcs)
rant schemes have been recognized by using the trinomial model. Granting of the 2005 scheme’s
                                                                                                    Outstanding at the beginning of the period        12.23         669.4          12.00      576.2
warrants to the Group’s management is dependent on the meeting of long-term financial targets
                                                                                                    Granted during the period                             -              -         13.53      114.6
that are set until the end of 2007. The achievement of these targets was not probable at the end    Forfeited during the period                                                    13.08      –21.4
                                                                                                                                                      13.53         –29.3
of the financial period and therefore no expense in accordance with IFRS 2 has been recognized       Expired during the period                         12.63           –0.5             -          -
in the Group’s 2005 earnings. The expense recorded in 2006 financial period is wholly related to     Exercised during the period                           -              -             -          -
the 2004 warrant scheme.                                                                            Outstanding at the end of the period              12.20         639.6          12.23      669.4
   General terms and conditions as well as exercise prices of warrant schemes given to the          Exercisable at the end of the period              11.44         418.7          10.79      269.2
Group’s key employees are presented on pages 94–95 and 97.




                                                                                                                                                                                                       77
                            9. FINANCING INCOME AND EXPENSES                                                                                    Reconciliation between income taxes at local tax rates in different countries and the total tax
                                                                                                                                                expense in the income statement:
                            EUR million                                                                            2006                 2005    EUR million                                                             2006             2005
                            Interest income                                                                         1.2                   1.4   Taxes at local rates applicable to earnings
                            Exchange rate gains                                                                     0.6                   0.2   in countries concerned                                                  31.7              25.6
                            Interest expenses                                                                     –24.7                 –10.8   Taxes for prior periods                                                  0.2              –1.7
                            Fair valuation of derivative financial instruments                                      –0.7                   0.2   Deductible goodwill amortization                                        –1.8              –1.8
                            Net gain on non-qualifying cash flow hedges                                              0.0                     -   Tax credits                                                             –8.4              –6.4
                            Total                                                                                 –23.6                  –9.0   Recognition of negative goodwill generated in the Salomon
                                                                                                                                                acquisition                                                                -             –19.4
                            The change in the fair value of derivative contracts is primarily due to the fair valuation of interest             Other                                                                    4.4               1.6
                            rate swaps not included in the hedge accounting.                                                                    Taxes recognized in the income statement                                26.1              –2.1

                                                                                                                                                Effective tax rate, %                                                     27                 -
                            10. INCOME TAXES

                            EUR million                                                                            2006                 2005    11. EARNINGS PER SHARE
                            Current taxes:
                               Finland                                                                               5.8                  5.5                                                                           2006             2005
                               Austria                                                                               0.3                  3.2   Net result attributable to equity holders of the parent company,
                               USA                                                                                   1.0                 11.6   EUR million                                                              70.3             75.2
                               Japan                                                                                 0.1                  4.8   Net result attributable to equity holders of the parent company,
                               Other countries                                                                      10.3                  8.3   pro forma, EUR million                                                      -             62.2
                            Total                                                                                   17.5                 33.4
                            Deferred taxes *)                                                                        8.6                –35.5   Weighted average number of shares outstanding during the
                            Total                                                                                   26.1                 –2.1   period (1,000 pcs)                                                    71,523            71,425
                                                                                                                                                Earnings per share, EUR                                                 0.98              1.05
                            *)
                             Deferred taxes recognized on non-recurring items related to the Salomon acquisition reduced tax expenses for
                                                                                                                                                Earnings per share, pro forma, EUR                                         -              0.87
                            2005 by EUR 38.5 million. Note 3 presents the impact of the Salomon acquisition on the Group’s financial position
                            and earnings. The reconciliation of deferred tax assets and liabilities is presented in note 14.
                                                                                                                                                Weighted average number of shares outstanding during the
                                                                                                                                                period, adjusted for the dilutive effect of warrants (1,000 pcs)      72,401            71,974
                                                                                                                                                Earnings per share, diluted, EUR                                        0.97              1.04
                                                                                                                                                Earnings per share, diluted, pro forma, EUR                                -              0.86
FINANCIAL STATEMENTS




                       78
12. INTANGIBLE AND TANGIBLE NON-CURRENT ASSETS

                                                                                              Other                    Buildings    Machinery       Other      Advances paid
                                                           Intangible                    intangible    Land and              and          and    tangible    and construction
EUR million                                                    rights         Goodwill       assets       water    constructions    equipment      assets         in progress
Initial cost, January 1, 2006                                   237.0            416.6           1.8        14.3           154.2         343.4         0.8                 4.3
Additions                                                         4.1                -           1.0         0.4              1.6         17.5         0.3                16.4
Company divestments and disposals                                   -                -             -         0.0             –1.9        –13.8           -                 0.0
Transfers                                                         1.9                -         –0.1          0.0              0.4          8.3           -              –13.3
Translation differences                                          –5.7            –34.5         –0.1         –0.4             –4.4        –11.8       –0.1                 –0.3
Balance, December 31, 2006                                      237.3            382.1           2.6        14.3           149.9         343.6         1.0                 7.1
Accumulated depreciation and impairment losses,
January 1, 2006                                                  20.6            104.9          1.1          0.1           106.4         296.9          -                  0.2
Depreciation during the period                                   10.0                -          0.2            -             4.3          17.7          -                    -
Company divestments and disposals                                   -                -            -            -            –1.6         –11.8          -                    -
Transfers                                                        –1.2              0.3          0.1            -            –0.2          –2.1          -                    -
Translation differences                                          –0.6            –13.4         –0.2          0.0            –3.2          –9.6          -                  0.0
Balance, December 31, 2006                                       28.8             91.8          1.2          0.1           105.7         291.1          -                  0.2
Balance sheet value, December 31, 2006                          208.5            290.3          1.4         14.2            44.2          52.5        1.0                  6.9

Carrying amount of finance leases included                           -                -            -          1.2             2.4           0.3        0.0                   -

Accumulated impairment losses of goodwill at January 1, 2006 totaled EUR 16.9 million.
                                                                                              Other                    Buildings    Machinery       Other      Advances paid
                                                           Intangible                    intangible    Land and              and          and    tangible    and construction
EUR million                                                    rights         Goodwill       assets       water    constructions    equipment      assets         in progress
Initial cost, January 1, 2005                                     7.3            378.1           1.8        13.3             91.3        148.2         0.6                 3.5
Additions                                                         3.9                -           0.3           -              0.4         13.3         0.1                 8.8
Company acquisitions                                            224.2                -           0.3         1.2             54.3        169.3         0.1                 1.8
Company divestments and disposals                                   -                -             -        –0.6             –1.3        –10.4           -                –0.8
Transfers                                                         1.2                -         –0.7          0.0              3.3          9.6           -                –9.4
Translation differences                                           0.4             38.5           0.1         0.4              6.2         13.4           -                 0.4
Balance, December 31, 2005                                      237.0            416.6           1.8        14.3           154.2         343.4         0.8                 4.3
Accumulated depreciation and impairment losses,
January 1, 2005                                                   3.4             93.9          0.9          0.1            46.9         123.8          -                  0.2
Depreciation during the period                                    3.5                -          0.2            -             3.6          12.8          -                    -
Company acquisitions                                             13.2                -          0.2            -            50.1         158.9          -                    -
Company divestments and disposals                                   -                -            -            -            –0.1          –9.5          -                    -
Impairment losses                                                   -                -            -            -             1.1           0.6          -                    -
Transfers                                                         0.3                -         –0.3            -             0.8          –1.5          -                    -
Translation differences                                           0.2             11.0          0.1            -             4.0          11.8          -                    -
Balance, December 31, 2005                                       20.6            104.9          1.1          0.1           106.4         296.9          -                  0.2
Balance sheet value, December 31, 2005                          216.4            311.7          0.7         14.2            47.8          46.5        0.8                  4.1

Carrying amount of finance leases included                           -                -            -          1.2             1.2           0.3          -                    -

Accumulated impairment losses of goodwill at January 1, 2005 totaled EUR 14.7 million.




                                                                                                                                                                                 79
                            13. AVAILABLE-FOR-SALE INVESTMENTS AND MARKETABLE SECURITIES

                            Available-for-sale investments consist in their entirety of shares in unlisted companies. They are   Liquid funds include cash in hand and deposits held at call with banks. The Group did not possess
                            measured at cost, because reliable fair values cannot be established or they do not materially       any marketable securities at the end of the financial period.
                            differ from their initial costs.

                            14. RECONCILIATION OF DEFERRED TAX ASSETS AND LIABILITIES
                                                                                                                       Charge
                                                                                                                    in income           Translation               Charged
                            EUR million                                               Jan. 1, 2006                  statement           differences               to equity           Dec. 31, 2006
                            Deferred tax assets:
                            Provisions                                                        40.9                       –14.7                   0.0                      -                     26.2
                            Carryforward of unused tax losses                                  3.1                        11.8                   0.0                      -                     14.9
                            Pensions                                                           2.6                         0.2                   0.0                      -                      2.8
                            Impairment                                                        17.1                        –3.2                   0.0                      -                     13.9
                            Other temporary diffrences                                         2.9                         1.1                   0.0                      -                      4.0
                            Total                                                             66.6                        –4.8                   0.0                      -                     61.8

                            Deferred tax liabilities:
                            Fair value adjustments                                           –16.1                         2.8                     -                    1.5                    –11.8
                            Depreciation differences                                          –2.4                        –0.4                   0.0                      -                     –2.8
                            Other temporary differences                                       –8.0                        –6.2                  –0.3                      -                    –14.5
                            Total                                                            –26.5                        –3.8                  –0.3                    1.5                    –29.1

                            Net deferred tax assets                                           40.1                        –8.6                  –0.3                    1.5                     32.7

                            Deferred taxes recognized in the balance sheet at December 31, 2006:
                              Deferred tax assets                              EUR 45.7 million
                              Deferred tax liabilities                         EUR 13.0 million
                                                                                                                       Charge
                                                                                                                    in income           Translation                                        Charged
                            EUR million                                               Jan. 1, 2005                  statement           differences            Acquisitions                to equity               Dec. 31, 2005
                            Deferred tax assets:
                            Provisions                                                         6.9                        16.0                   0.2                   17.8                        -                        40.9
                            Carryforward of unused tax losses                                  5.4                        –4.9                   0.3                    2.3                        -                         3.1
                            Pensions                                                           3.8                        –2.1                   0.2                    0.7                        -                         2.6
                            Impairment                                                         3.8                        –1.2                   0.1                   14.4                        -                        17.1
                            Other temporary diffrences                                         2.0                         0.6                   0.1                    0.0                      0.2                         2.9
                            Total                                                             21.9                         8.4                   0.9                   35.2                      0.2                        66.6
FINANCIAL STATEMENTS




                            Deferred tax liabilities:
                            Fair value adjustments                                               -                        20.6                     -                  –36.7                        -                       –16.1
                            Depreciation differences                                          –2.5                         0.2                   0.0                   –0.1                        -                        –2.4
                            Other temporary differences                                      –13.2                         6.3                   0.0                   –1.1                        -                        –8.0
                            Total                                                            –15.7                        27.1                   0.0                  –37.9                        -                       –26.5

                            Net deferred tax assets                                            6.2                        35.5                   0.9                   –2.7                      0.2                        40.1

                            Deferred taxes recognized in the balance sheet at December 31, 2005:
                              Deferred tax assets                              EUR 53.9 million
                              Deferred tax liabilities                         EUR 13.8 million

                            At December 31, 2006 there were unused tax losses carried forward and other temporary differences of EUR 29.8 million (2005: EUR 18.1 million) for which no deferred tax asset was recognized.
                            The unrecognized deferred tax assets at December 31, 2006 totaled EUR 9.4 million (2005: EUR 6.1 million).
                       80
15. VALUATION PROVISIONS OF INVENTORIES AND ACCOUNTS RECEIVABLE

EUR million                                                                       2006                          2005
Allowance for doubtful accounts                                                   21.0                           21.0
Obsolescence reserve for inventories                                              39.1                           42.4


16. PREPAID EXPENSES AND OTHER RECEIVABLES

EUR million                                                                       2006                          2005
Prepaid interest                                                                   2.4                            2.3
Prepaid advertising and promotion                                                  3.6                            2.4
Other prepaid expenses                                                            31.3                           22.4
Other receivables                                                                 28.5                           43.0
Total                                                                             65.8                           70.1



17. SHAREHOLDERS’ EQUITY

                                                                                                                    Premium
EUR million                                                 Number of shares               Share capital               fund *)
January 1, 2005                                                   71,419,860                      285.7                   0.8
Warrants exercised                                                     47,850                        0.2                  0.5
December 31, 2005                                                 71,467,710                      285.9                   1.3

Warrants exercised                                                       229,914                       0.9                5.6
December 31, 2006                                                     71,697,624                     286.8                6.9

*)
     Also including unregistered share issue (Dec. 31, 2005: EUR 0.1 million; Dec. 31, 2006: EUR 1.6 million)


The section “shares and shareholders” on pages 94–100 provides additional information on numbers of shares and share
capital. The Group’s warrant schemes are discussed on pages 94–95.

Translation differences
Translation differences comprise the differences arising from the elimination of net investments in non-euro Group units.

Fair value and other reserves
Fair value and other reserves include changes in the fair values of available-for-sale investments and derivative financial
instruments used for hedging cash flows.




                                                                                                                                 81
                            18. INTEREST-BEARING LIABILITIES

                            INTEREST-BEARING LONG-TERM LIABILITIES
                                                                                      Outstanding                                                         Repayments
                            EUR million                                              Dec. 31, 2006                2007                2008                 2009                   2010      2011        2012 and after
                            Loans from financial institutions                                 240.7                  0.1                 0.1                    -                      -     240.5                    -
                            Pension loans                                                       2.5                 1.1                 0.9                  0.5                      -         -                    -
                            Other long-term debt                                                3.6                 1.7                 1.5                  0.0                    0.0       0.4                    -
                            Total                                                            246.8                  2.9                 2.5                  0.5                    0.0     240.9                    -

                                                                                      Outstanding                                                         Repayments
                            EUR million                                              Dec. 31, 2005                2006                2007                 2008                   2009      2010        2011 and after
                            Loans from financial institutions                                 252.8                  3.4                   -                    -                      -     249.4                    -
                            Pension loans                                                       3.6                 1.1                 1.1                  1.0                    0.4         -                    -
                            Other long-term debt                                                6.1                 1.8                 1.8                  1.4                    1.1         -                    -
                            Total                                                            262.5                  6.3                 2.9                  2.4                    1.5     249.4                    -




                            INTEREST-BEARING CURRENT LIABILITIES                                                                FINANCE LEASE LIABILITIES
                            EUR million                                                           2006                 2005     EUR million                                                 2006                  2005
                            Commercial papers                                                    373.6                 308.2    Finance lease liabilities are due as follows:
                            Current repayments of long-term loans                                  2.9                   6.3       Not later than one year                                    1.6                   1.5
                            Other interest-bearing current debt                                   10.5                  79.0       Later than one year but not later than five years           1.5                   2.6
                            Total                                                                387.0                 393.5       Later than five years                                       0.4                   0.4
                                                                                                                                Total minimum payments                                        3.5                   4.5
                            INTEREST-BEARING LIABILITIES AT FAIR VALUE
                                                                                                                                Present value of minimum lease payments is not materially different from their carrying
                                                                                 2006                         2005
                                                                         Carrying                     Carrying                  amount.
                            EUR million                                   amount    Fair value         amount     Fair value
                            Loans from financial institutions                240.7        240.7           252.8         252.8    19. ACCRUED LIABILITIES
                            Pension loans                                     2.5          2.5              3.6           3.7
                            Commercial papers                               373.6        373.6           308.2         308.2    EUR million                                                  2006                 2005
                            Other interest-bearing short-term debt           14.1         14.1            85.1          85.1    Accrued personnel costs                                      88.5                  86.7
FINANCIAL STATEMENTS




                            Total                                           630.9        630.9           649.7         649.8    Accrued interest                                              8.4                   4.7
                            Fair values have been calculated by discounting future cash flows at market based interest rates     Accrued rent                                                  2.3                   1.5
                            at the end of the financial period.                                                                  Accrued advertising and promotion                            12.7                  17.7
                                                                                                                                Value added tax                                              11.8                   7.4
                                                                                                                                Other accrued liabilities                                    96.4                  78.3
                                                                                                                                Total                                                       220.1                 196.3




                       82
20. PROVISIONS
                                                                                      Product
EUR million                                                                          warranty           Restructuring              Environmental                   Other                    Total
Balance at January 1, 2006                                                               18.5                    75.9                        1.4                      8.3                   104.1
Translation differences                                                                  –1.1                    –0.5                       –0.1                    –1.0                     –2.7
Provisions made during the year                                                          12.0                       -                          -                      6.4                    18.4
Provisions used during the year                                                          –9.5                   –33.3                          -                    –3.2                    –46.0
Unused provisions reversed during the year                                               –0.7                    –2.5                          -                    –1.2                     –4.4
Balance at December 31, 2006                                                             19.2                    39.6                        1.3                      9.3                    69.4

Current provisions                                                                        64.6
Long-term provisions                                                                       4.8
Total                                                                                     69.4

In December 2005, a restructuring provision of EUR 52.8 million associated with Salomon’s operations in France was recognized. At the end of 2006, EUR 28.5 million of this was unused.
The most important regular provisions are due to the repair or replacement of products during their warranty period. Environmental provisions are booked in the United States, and other liabilities
are not included in the Group’s environmental liabilities.

21. ADJUSTMENTS TO CASH FLOW FROM OPERATING ACTIVITIES                                              23. CONTINGENT LIABILITIES

EUR million                                                              2006             2005      EUR million                                                             2006            2005
Impairment losses                                                           -               1.7     Charges on assets
Recognition of negative goodwill generated by                                                         Nominal value of charges on assets                                       -              2.8
the Salomon acquisition                                                         -         –55.4     Mortgages pledged
Fair value adjustment on purchased inventories in                                                     Pension loans covered                                                  2.3              3.3
the Salomon acquisition                                                      -             57.2       Nominal value of mortgages pledged                                     2.6              3.7
Expensed warrants                                                          1.1              1.3       Other group liabilities:
Gains and losses on sale of non-current assets                            –0.5             –6,8       Nominal value of mortgages pledged                                     0.9              0.9
Other                                                                        -              0.1     Total nominal value of mortgages pledged                                 3.5              4.6
Total                                                                      0.6             –1.9
                                                                                                    Guarantees                                                               4.3              7.1
                                                                                                    Other contingent liabilities                                            50.9             52.9
22. OPERATING LEASE COMMITMENTS
                                                                                                    Other contingent liabilities are primarily due to long-term endorsement contracts with several
                                                                                                    professional and other leagues, particularly in the United States, and athlete contracts.
EUR million                                                             2006              2005        There are no guarantees or contingencies given for the management of the Group, for the
The future minimum payments of non-cancellable operating                                            shareholders, or for the affiliated companies.
leases:
   Not later than one year                                               23.5             23.1
   Later than one year but not later than five years                      47.2             32.9
   Later than five years                                                  32.3              4.4
Total                                                                   103.0             60.4

Total rent expense of non-cancellable operating
leases recognized in the income statement                                21.0             15.9

Other non-cancellable rental agreements are primarily related to the office and production
premises rented by the Group.


                                                                                                                                                                                                       83
                            24. INVESTMENTS IN SUBSIDIARIES AT DECEMBER 31, 2006

                                                                                                         Group        Book value,                                                                  Group    Book value,
                                                                                                     holding, %       EUR million                                                              holding, %   EUR million
                            Amer Sports Company, Chicago, USA                                                100            161.0         Amer Sports Poland Sp. z o.o., Krakow, Poland              100
                              Athletic Training Equipment Company, Inc., Sparks, USA                         100                          Atomic Austria GmbH, Altenmarkt, Austria                    95
                              Atomic Ski USA, Inc., Amherst, USA                                             100                          Salomon Danmark A.p.S., Kokkedal, Denmark                  100
                              Bonfire Snowboarding, Inc., Portland, USA                                       100                          ZAO Amer Sports, Moscow, Russia                            100
                              ClubCom, Inc., Pittsburgh, USA                                                 100                       Amer Sports Sourcing Ltd, Hong Kong, China                    100
                              Mavic, Inc., Haverhill, USA                                                    100                       Arc’teryx Equipment, Inc., Vancouver, B.C., Canada            100
                              Precor Incorporated, Woodinville, USA                                          100                       Fitz-Wright Holdings Ltd., Langley, B.C., Canada              100
                              Salomon North America, Inc., Portland, USA                                     100                          Bare Sportswear Corp., Blaine, Washington, USA             100
                              Suunto USA Inc., Carlsbad, USA                                                 100                          Fitz-Wright Company Ltd., Langley, B.C., Canada            100
                              Wilson Sporting Goods Co., Chicago, USA                                        100                          FitzWright Europe (Malta) Ltd., Zejtun, Malta              100
                                 Amer Sports Australia Pty Ltd, Braeside, Australia                          100                       Suunto AG, Biel, Switzerland                                  100
                                 Amer Sports Brazil LTDA., Sao Paulo, Brazil                                 100                          Recta AG, Biel, Switzerland                                100
                                 Amer Sports Canada Inc., Belleville, Ontario, Canada                        100                       Suunto Benelux B.V., Tholen, The Netherlands                   60
                                 Amer Sports Japan, Inc., Tokyo, Japan                                       100                    Suunto Oy, Vantaa, Finland                                       100           65.4
                                 Amer Sports Korea, Ltd., Seoul, Korea                                       100                       Amerb Oy, Helsinki, Finland                                   100
                                 Amer Sports Malaysia Sdn Bhd, Shah Alam, Malaysia                           100                          Amerc Oy, Helsinki, Finland                                100
                                 Amer Sports Thailand Company Limited, Bangkok, Thailand                      49 *)                    Suunto Software Solutions Oy, Helsinki, Finland               100
                                 Grupo Wilson, S.A. de C.V., Mexico City, Mexico                             100                       Ursuk Oy, Turku, Finland                                       60
                                    Asesoria Deportiva Especializada, S.A. de C.V., Mexico City, Mexico      100                    Varpat Patentverwertungs AG, Littau, Switzerland                 100            2.0
                                    Wilson Sporting Goods Co. de Mexico, S.A. de C.V., Mexico City, Mexico   100                    Non-operating companies                                                         0.0
                            Amer Sports Europe GmbH, Neuried, Germany                                        100             62.3   Total                                                                       1 070.2
                              Amer Sports Czech Republic s.r.o., Prague, Czech Republic                      100
                                                                                                                                    *)
                                                                                                                                         85% of votes
                              Amer Sports Deutschland GmbH, Neuried, Germany                                 100
                              Amer Sports Europe Services GmbH, Neuried, Germany                             100
                              Amer Sports Spain, S.A., Barcelona, Spain                                      100
                              Amer Sports UK Limited, Irvine, UK                                             100                    25. HEDGE RESERVE OF CASH FLOW HEDGES
                                 Precor Products Limited, Berkshire, UK                                      100
                            Amer Sports Finance Oy, Helsinki, Finland                                        100            508.8
                                                                                                                                    EUR million
                            Amer Sports Holding S.A.S., Villefontaine, France                                100             28.0
                                                                                                             100                    Balance at January 1, 2006                              –0.6
                              Amer Sports France S.A.S., Villefontaine, France
                              Salomon S.A., Annecy, France                                                   100                    Gains and losses deferred to shareholders’ equity
                                 Cliché S.A.S., Villeurbanne, France                                         100                      Hedging of operating cash flows                        –2.2
                                 Salomon Italia S.p.A., Bergamo, Italy                                       100                      Hedging of interest cash flows                          6.3
                                 Salomon Nordic AB, Borås, Sweden                                            100                    Gains and losses recognized in the income statement
                                 Salomon Norge A/S, Sandvika, Norway                                         100                      Hedging of operating cash flows                         2.2
                                 Salomon Romania Srl, Timisoara, Romania                                     100
                                                                                                                                    Deferred taxes                                          –1.5
                                 Salomon Sangiorgio S.p.A., Maser (Treviso), Italy                           100
                                                                                                             100                    Balance at December 31, 2006                             4.2
                                 Salomon Schweiz AG, Cham, Switzerland
                                 Salomon Sport Finland Oy, Helsinki, Finland                                 100
FINANCIAL STATEMENTS




                                 Salomon Österreich GmbH, Viktring, Austria                                  100                    Balance at January 1, 2005                               0.1
                            Amer Sports International Oy, Helsinki, Finland                                  100             67.1   Gains and losses deferred to shareholders’ equity
                            Amer Sports SA, Hagendorn, Switzerland                                           100              0.1     Hedging of operating cash flows                        –1.9
                            Amer Sports Suomi Oy, Helsinki, Finland                                          100              0.9     Hedging of interest cash flows                         –0.6
                            Amera Oy, Helsinki, Finland                                                      100
                                                                                                                                    Gains and losses recognized in the income statement
                            Amerintie 1 Oy, Helsinki, Finland                                                100              2.1
                                                                                                             100            172.5     Hedging of operating cash flows                         1.6
                            Amernet Holding B.V., Rotterdam, The Netherlands
                              Amer Sports HK Limited, Hong Kong, China                                       100                    Deferred taxes                                           0.2
                              Amer Sports Holding GmbH, Altenmarkt, Austria                                  100                    Balance at December 31, 2005                            –0.6
                                 Amer Sports Italia S.p.A., Nervesa della Battaglia, Italy                   100
                                 Amer Sports Luxembourg S.á r.l., Luxembourg                                 100
                                    Amer Sports Finance S.P.R.L., Brussels, Belgium                          100
                                    Amer Sports Sverige AB, Malmö, Sweden                                    100

                       84
26. FINANCIAL RISK MANAGEMENT


The global business of Amer Sports involves customary financial              Commercial paper is the Company’s main source of short-term              In addition to the aforementioned currency pairs, the Company
risks. Financial risk management is centralized within the Parent           funding, with long-term credit facilities ensuring the availability   has small currency-denominated purchases in certain Asian and
Company’s Treasury. Risk management is governed by a financial               of funding.                                                           South American currencies. These cash flows were not hedged
strategy approved by the Board of Directors. This strategy includes            Any extra liquidity is placed in short-term investments ap-        during 2006.
principles and risk limits relating to its balance sheet structure,         proved by the Financial Committee. The Company manages main              The strengthening of the euro weakens the result of operations
banking relations and risk management. Financial risks are re-              currency liquidity with nine cash pool systems.                       due to inter-company sales denominated in foreign currencies
viewed by the Board of Directors at least once a year. Operational             Inter-company netting is used in payments between subsid-          and the currency-denominated results of subsidiaries. However,
risks are monitored regularly. The Company has a Financial Com-             iaries.                                                               a significant share of the USD-denominated purchase cost risk is
mittee that reviews the major risks and agrees with the business                                                                                  eliminated against the USD-denominated result of operations.
areas on how the financial principles are to be applied.                     CURRENCY RISK                                                            According to the Company’s hedging policy, the units hedge
   Treasury is responsible for arranging adequate finance on                 The Company operates in all major currency areas, and it has          their forecast 12–18 month cash flow with forward contracts.
competitive terms, using equity or debt instruments. Foreign                subsidiaries in 29 countries. Risk management aims to eliminate          The hedge ratio is higher for nearby months than for later
exchange and interest rate risks are managed so that changes                the foreign exchange risks associated with the Company’s bal-         periods. The hedge ratio of the units is maintained between 30%
in rates do not jeopardize shareholder value, the Company’s                 ance sheet and to hedge the commercial foreign exchange risks         and 70% of the cash flows forecast for the next 12 months, except
annual result or the equity ratio. Treasury is not a profit center           of subsidiaries. The Company utilizes hedge accounting for its        for the winter sports business, where the ratio is 80 to 120% due
as such, but various benchmarking methods are nevertheless                  commercial risk hedging. The Company monitors its hedge ratio         to the nature of the business.
used to assess its performance.                                             daily and tests its effectiveness at three month intervals. The im-      Forward contracts are the main hedging instrument. The spot
   Treasury is also responsible for Group insurance management.             pact of effective hedges is booked as an adjustment to purchases      value of the forward contracts corresponds fully to the change
Due to the nature of operations, insurance management focuses               and sales. The amount of ineffective hedges was not material.         in value of currency-denominated cash flows, which makes
on product liability, property damage and business interruption             As from the beginning of 2007, the policy will change such that       the hedges effective. The forward points are booked as interest
insurance policies.                                                         the Company will utilize hedge accounting only for major cash         expenses and income.
                                                                            flows with a countervalue of over EUR 10 million.                         The Company’s foreign exchange position consists of currency-
FINANCIAL STRUCTURE                                                            The balance sheet risk is hedged by financing each subsidiary       denominated loans, deposits and off-balance sheet items, of
Amer Sports aims to preserve a balanced financial structure. Ex-             in its home currency. According to its financial strategy, the         which forward contracts are the most important. The impact of
cessive loan maturity concentrations are avoided. Funding is raised         Company may hedge 0 to 50% of subsidiaries’ equity. At the end        currency movements on the Company’s foreign exchange position
from various sources, and the Company regularly issues domestic             of 2006 there were no equity hedges outstanding.                      is booked as a financing item. From time to time, the Company
commercial papers. Standard credit documentation seeks to in-                  The most important business risk arising from currencies is        has open positions as allowed in the risk policy. The maximum
sure the equal treatment of banks and agree on financing under               the foreign exchange risk created by cash flows in non-home            position in 2006 did not exceed the EUR 25 million limit set by
the same terms. Financial costs are optimized in relation to the            currencies. This risk arises when a unit sells, in its home cur-      the Board of Directors.
goals stated for the financial structure and risk management.                rency, goods whose costs are denominated in a foreign currency,
   Amer Sports’ debt is raised through the Parent Company                   or sells goods in a non-home currency.                                INTEREST RATE RISK
as a rule. The Company builds long-term relationships with                     The breakdown of the total amount of such cash flows (EUR           The Company is exposed to interest rate risk when financing
providers of finance, enabling it to meet significant new funding             million):                                                             the Company’s operations with euro or foreign currency-de-
requirements.                                                                                            Sell                                     nominated debt. Interest rate derivatives – such as interest rate
                                                                                EUR USD    JPY SEK GBP CAD CHF NOK CZK AUD PLN RUB DKK            swaps and forward rate agreements – are utilized to manage and
                                                                            USD 117         26      22  17               7
LIQUIDITY RISK                                                                                                                                    control the cash flow risk caused by interest rate movements.
                                                                      Buy




                                                                            EUR      81     26  36  13  19  30   6   8       6   5   4
The cornerstone of the Company’s funding is a credit facility               CAD   3   8          1   2       3   3                                In the hedging of the foreign currency-denominated part of the
amounting to EUR 575 million. The agreement was signed in                                                                                         balance sheet, interest rate differences between currencies are
December 2005. The credit has been extended and will mature in              At the turn of the year, the cash flows were hedged as follows         realized as interest expenses or income.
2011. At the end of the year, EUR 165 million and USD 100 million           (EUR million):                                                           Duration and ratio of fixed rate to floating rate debt are used in
of the facility had been drawn down, and the undrawn committed                                         Sell                                       the management of the interest rate position. Duration is calculated
                                                                                EUR USD    JPY SEK GBP CAD CHF NOK CZK AUD PLN RUB DKK
credit facility amounted to EUR 325 million.                                                                                                      with the repricing date of the interest period of financing items. At
                                                                            USD  77          8      11   7               3
                                                                      Buy




   The Company has a domestic commercial paper program                      EUR      49     10  28   9   9  15   0   5       6   2   0            the turn of the year, the duration of financing items was about 1.1
amounting to EUR 500 that is used for working capital purposes.             CAD   2   6          1   2       2   2                                years and fixed rate debt accounted for 49% of total net debt.

                                                                                                                                                                                                                         85
                               On the closing date, the sensitivity of interest expenses to          DERIVATIVE CONTRACTS
                            an increase/decrease of one percentage point in interest rates                                                        Dec. 31, 2006                      Maturity structure                                  Dec. 31, 2005
                            – provided other factors were to remain unchanged – amounted                                                    Nominal                                                                   2009             Nominal      Fair
                            to about EUR 2.5 million over the next 12 months.                        EUR million                              value    Fair value                2007             2008             or later              value     value
                               The effective interest rate on total net debt in 2006 was 3.6%.       Hedge accounting-related
                            The effective interest rate was 4.1% on syndicated loan, 4.5% on           Forward contracts hedging cash
                            pension loans and 3.1% on commercial papers.                               flow from operations                     289.8                 –0.1        289.8                   -                -               377.7      –0.2
                               The Company applies hedge accounting to interest rate deriva-           Interest rate swaps hedging
                            tives that meet the criteria for hedge accounting and are directly re-     interest cash flow                       225.9                  5.7             -                  -           225.9                234.8      –0.6
                            lated to certain loans. Other interest rate derivatives are measured     Other derivative contracts
                            at fair value and the result is recognized in financing items.              Forward contracts                        51.5                  4.4         51.5                   -                -                26.5      –5.3
                                                                                                       Interest rate swaps                         -                    -            -                   -                -                42.4       0.5
                            CREDIT RISK                                                                Forward rate agreements                 275.9                  0.2        275.9                   -                -               200.0       0.1
                            The Company is exposed to credit risk through accounts receiv-
                            able. The Group has a global customer base, and there are no
                            significant risk concentrations. The largest single customer              MATURITY STRUCTURE
                            accounts for 3% of total accounts receivable and the largest 20                                         Dec. 31, 2006                      2007   2008   2009       2010     2011                      Dec. 31, 2005
                            combined total about 20%. The Company’s use of credit insur-             EUR million               Drawn Available             Total                                                              Drawn Available    Total
                            ance and factoring is slight.                                            Loans from
                               Customers in the fitness equipment business often use leasing          financial institutions      240.7                      240.7        0.1    0.1                       240.5                 252.8                252.8
                            financing, and the Company takes limited recourse risk for the            Pension loans                2.5                        2.5        1.1    0.9        0.5                                    3.6                  3.6
                            arrangements through repurchase agreements.                              Other interest-
                                                                                                     bearing debt                14.1                       14.1       12.2    1.5                           0.4                85.1                 85.1
                               The Company seeks to minimize its cash items. Extra liquidity
                                                                                                     Committed revolving
                            is placed either in deposits in banks or in high-quality money
                                                                                                     credit facilities              -      325.0           325.0                                         325.0                     -      325.0     325.0
                            market instruments within the limits approved by the Financial           Commercial papers          373.6                      373.6      373.6                                                    308.2                308.2
                            Committee.                                                               Total                      630.9      325.0           955.9      387.0    2.5        0.5    0.0 565.9                     649.7      325.0     974.7
                               Interest-bearing debt by currency after foreign exchange
                            and interest rate derivatives and facility fees at the end of the
                            financial period:
                                                                                                     INTEREST FIXING PERIODS
                                       Dec. 31,    Dec. 31,              Dec. 31,    Dec. 31,                                                                         Dec. 31, 2006                                                        Dec. 31, 2005
                                         2006         2005                  2006        2005         EUR million                 0–3 mo       4–6 mo               7–9 mo     10–12 mo          1–2 yr        2–3 yr Over 3 yr            0–1 yr Over 1 yr
                                    EUR million EUR million           Interest, % Interest, %        Debt                         –240.8       –317.7                –55.5        –14.0           –2.9                                    –634.1     –3.3
                            AUD             4.6          4.1                 6.12        5.82        Cash & deposits                45.5                                                                                                    48.7
                            CAD           50.8         50.1                  4.59        3.49
                                                                                                     Loan receivables                0.5                                                                                                              0.5
                            CHF             5.6          4.1                 1.93        1.18
                                                                                                     Forward rate agreements        25.0            75.0           –100.0
                            CZK             0.1          1.2                 2.47        2.53
FINANCIAL STATEMENTS




                                                                                                     Interest rate swaps                           225.9                                                                 –225.9            234.8   –234.8
                            GBP             3.0                              5.06
                            EUR          322.8       338.6                   3.55        2.65        Net                          –169.8           –16.8           –155.5         –14.0          –2.9              0.0   –225.9           –350.6   –237.6
                            HUF             0.4          0.3                 3.55        6.07
                            JPY           21.5         15.3                  0.36        0.47        (+ = assets, – = debt)
                            KRW             4.8          2.5                 4.04        4.04
                            MXN             8.8          9.4                 7.57        8.00
                            NOK             0.6          1.4                 3.74        2.77
                            PLN             4.9          3.2                 4.00        4.78
                            RUB             2.6          2.8                 6.80        7.80
                            SEK             7.4          8.8                 2.97        1.86
                            SKK             0.3          0.3                 3.55        3.07
                            USD          192.7       207.7                   5.12        4.26
                            Total        630.9       649.7                   4.09        3.29
                       86
CALCULATION OF KEY INDICATORS


EARNINGS PER SHARE:
Net result attributable to equity holders of the parent company
Average number of shares adjusted for the bonus element of share issues

EQUITY PER SHARE:
Shareholders’ equity 1)
Number of shares at year end adjusted for the bonus element of share issues

DIVIDEND PER SHARE:
Total dividend
Number of shares at year end adjusted for the bonus element of share issues

DIVIDEND % OF EARNINGS:
       Adjusted dividend
100 x
       Net result

EFFECTIVE YIELD, %:
      Adjusted dividend
100 x
      Adjusted share price at closing date

P/E RATIO:
Adjusted share price at closing date
Earnings per share

MARKET CAPITALIZATION:
Number of shares at year end multiplied by share price at closing date

RETURN ON CAPITAL EMPLOYED (ROCE), %:
      EBIT
100 x
      Capital employed 2)

RETURN ON INVESTMENT (ROI), %:
      Earnings before taxes + interest and other financing expenses
100 x
      Balance sheet total less interest-free liabilities 3)

RETURN ON SHAREHOLDERS’ EQUITY (ROE), %:
      Earnings before taxes - taxes
100 x
      Shareholders’ equity 4)

EQUITY RATIO, %:
       Shareholders’ equity
100 x
       Balance sheet total less advances received

DEBT TO EQUITY RATIO:
Interest-bearing liabilities
Shareholders’ equity

GEARING, %:
      Interest-bearing liabilities - liquid funds
100 x
      Shareholders’ equity

1)                                 2)
   Excluding minority interests       Non-current assets + working capital excluding receivables and payables
                                                                          3)
relating to interest and taxes, monthly average of the financial period       Monthly average of the financial period
4)
   Average of the financial period


                                                                                                                      87
                            PARENT COMPANY INCOME STATEMENT                                  PARENT COMPANY BALANCE SHEET
                                                                                             ASSETS

                            EUR million                                Note   2006    2005   EUR million                       Note     2006      2005

                            Other operating income                        1    10.3   12.3   NON-CURRENT ASSETS

                            EXPENSES                                                         INTANGIBLE ASSETS                    7
                            Personnel expenses                            2     6.8    5.9     Intangible rights                          0.5       0.4
                            Depreciation                                  3     0.8    0.7     Other intangible assets                      -       0.1
                            Other expenses                                      7.8    7.5                                                0.5       0.5
                            Total expenses                                     15.4   14.1
                                                                                             TANGIBLE ASSETS                      7
                            EARNINGS BEFORE INTEREST AND TAXES                 –5.1   –1.8     Land and water                            1.2       1.2
                                                                                               Buildings and constructions              11.4      12.0
                            Financing income and expenses                 4    –7.0   10.9     Machinery and equipment                   0.7       0.6
                                                                                               Other tangible assets                     0.6       0.6
                            EARNINGS BEFORE EXTRAORDINARY ITEMS               –12.1    9.1                                              13.9      14.4

                            Extraordinary items                           5    30.8   15.3   OTHER NON-CURRENT INVESTMENTS
                                                                                               Investments in subsidiaries        8   1,070.2    954.8
                            EARNINGS BEFORE APPROPRIATIONS AND TAXES           18.7   24.4     Receivables from subsidiaries              1.1        -
                                                                                               Other bonds and shares                     2.6      2.7
                            Appropriations                                      0.1    0.0     Other non-current receivables              1.0      1.0
                            Taxes                                         6    –3.8   –4.6                                            1,074.9    958.5

                            NET RESULT                                         15.0   19.8   TOTAL NON-CURRENT ASSETS                 1,089.3    973.4


                                                                                             CURRENT ASSETS

                                                                                             RECEIVABLES
                                                                                               Accounts receivable                       0.2       0.1
                                                                                               Receivables from subsidiaries      9    401.8     397.6
                                                                                               Other receivables                         0.3       0.3
                                                                                               Prepaid expenses                  10      2.6       2.5
                                                                                                                                       404.9     400.5
FINANCIAL STATEMENTS




                                                                                             CASH AND CASH EQUIVALENTS                    2.7       3.6

                                                                                             TOTAL CURRENT ASSETS                      407.6     404.1

                                                                                             ASSETS                                   1,496.9   1,377.5




                       88
                                                                          PARENT COMPANY CASH FLOW STATEMENT
SHAREHOLDERS’ EQUITY AND LIABILITIES

EUR million                                    Note     2006      2005    EUR million                                                                            2006     2005

SHAREHOLDERS’ EQUITY                             11                       CASH FLOW FROM OPERATING ACTIVITIES
  Share capital                                        286.8     285.9       EBIT                                                                                 –5.1     –1.8
  Issue of shares                                        1.6       0.0       Depreciation                                                                          0.8      0.7
  Premium fund                                           5.3       1.3       Adjustments to cash flow from operating activities                                     0.0     –8.4
  Retained earnings                                    251.5     267.5    Cash flow from operating activities before change in working capital                     –4.3     –9.5
  Net result                                            15.0      19.8       Increase (–) or decrease (+) in trade and other current receivables                  –0.9     –2.8
TOTAL SHAREHOLDERS’ EQUITY                             560.2     574.5       Increase (+) or decrease (–) in interest-free current liabilities                     5.2     –1.4
                                                                          Change in working capital                                                                4.3     –4.2
ACCUMULATED APPROPRIATIONS                                                Cash flow from operating activities before financing items and taxes                       0.0    –13.7
  Accumulated depreciation in excess of plan     12       0.7       0.8      Interest paid                                                                       –16.2     –7.4
                                                                             Interest received                                                                     0.2      0.1
PROVISION FOR CONTINGENT LOSSES                                              Income taxes paid                                                                    –4.6     –0.2
  Provision for pension liability                         0.1       0.1   Financing items and taxes                                                              –20.6     –7.5
                                                                          Total cash flow from operating activities                                               –20.6    –21.2
LIABILITIES
                                                                          CASH FLOW FROM INVESTING ACTIVITIES
LONG-TERM LIABILITIES                            13                         Company divestments                                                                      -    180.4
  Loans from financial institutions                     240.5     249.3      Company acquisitions                                                                –111.0   –535.8
  Pension loans                                          1.4       2.3      Capital expenditure                                                                   –0.4     –0.3
                                                       241.9     251.6      Proceeds from sale of tangible non-current assets                                        -      0.8
                                                                            Proceeds from sale of other non-current investments                                    0.2      1.6
CURRENT LIABILITIES                                                         Loans granted                                                                         –1.1        -
  Interest-bearing liabilities                   14    381.2     341.7      Repayments of loans                                                                      -      0.6
  Accounts payable                                       0.6       1.1      Interest received from non-current receivables                                         0.0      0.1
  Payables to subsidiaries                       15    295.9     191.3    Cash flow from investing activities                                                    –112.3   –352.6
  Other current liabilities                              0.2       0.2
                                                                          CASH FLOW FROM FINANCING ACTIVITIES
  Accrued liabilities                            16     16.1      16.2
                                                                 550.5      Issue of shares                                                                        6.5      0.7
                                                       694.0
TOTAL LIABILITIES                                                802.1      Change in short-term borrowings                                                      130.7    291.0
                                                       935.9
                                                                            Withdrawals of long-term borrowings                                                      -    249.3
SHAREHOLDERS’ EQUITY AND LIABILITIES                            1,377.5     Repayments of long-term borrowings                                                    –0.9    –25.9
                                                      1,496.9
                                                                            Change in current receivables                                                         34.0   –140.1
                                                                            Dividends paid                                                                       –35.7    –35.7
                                                                            Group contribution paid                                                                  -     –0.5
                                                                            Group contribution received                                                            9.1     35.3
                                                                            Other financing items *)                                                              –11.7      3.2
                                                                          Cash flow from financing activities                                                      132.0    377.3

                                                                          CHANGE IN LIQUID FUNDS                                                                  –0.9      3.5

                                                                          Liquid funds
                                                                             Liquid funds at year end                                                              2.7      3.6
                                                                             Liquid funds at year beginning                                                        3.6      0.1
                                                                          Change in liquid funds                                                                  –0.9      3.5

                                                                          *)
                                                                               Including, for example, cash flow from hedging intercompany balance sheet items                     89
                            PARENT COMPANY ACCOUNTING POLICIES


                            The Parent Company’s financial statements are presented in              TANGIBLE NON-CURRENT ASSETS
                            accordance with Finnish law. The results are reported in euros         Tangible non-current assets are stated at cost less accumulated
                            using the historical cost convention.                                  depreciation.
                                                                                                     Depreciation is calculated on a straight-line basis in order
                            FOREIGN CURRENCIES                                                     to write off the cost or revalued amounts of assets over their
                            The Parent Company records foreign currency transactions               expected useful lives, which are as follows:
                            at the rates of exchange on the transaction date. Assets and
                            liabilities denominated in foreign currencies are translated at        Intangible rights and
                            the average rate of exchange confirmed by the European Central          other capitalized expenditure                           5–10 years
                            Bank in effect at the balance sheet date.                              Buildings                                                 40 years
                               Exchange rate gains and losses related to financing opera-           Machinery and equipment                                 4–10 years
                            tions are reported at their net values as financing income and
                            expenses.                                                              Land is not depreciated.

                            DERIVATIVE INSTRUMENTS                                                 PROVISION FOR CONTINGENT LOSSES
                            The Company’s derivative instruments include foreign exchange          Future costs and losses which the company has an obligation to
                            forward contracts, forward rate agreements and interest rate           settle and which are certain or likely to occur are disclosed in the
                            swaps. Foreign exchange forward contracts are used to hedge            income statement under an appropriate expense heading. They
                            against changes in the value of receivables and liabilities denom-     are presented in the balance sheet as provisions for contingent
                            inated in a foreign currency and the forward rate agreements and       losses when the precise amount or timing is not known. In other
                            interest rate swaps to hedge against the interest rate risk.           cases they are presented as accrued liabilities.
                               Foreign exchange forward contracts are measured at fair value
                            by recognizing the exchange rate difference in the income state-       LEASING
                            ment. The original interest rate differential on foreign exchange      Leasing payments are treated as rental expenses.
                            forward contracts is amortized to profit and loss. Forward rate
                            agreements and interest rate swaps are not measured at fair            PENSION PLANS
                            value, but their fair values are presented in the notes. The fair      The pension and related fringe benefit arrangements of the
                            value of forward rate agreements is based on the market prices         Parent Company’s employees are administered by a pension
                            quoted on the closing date. The fair values of interest rate swaps     insurance company and recorded as determined by actuarial
                            are calculated as the current value of future cash flows. The           calculations and payments to the insurance company.
                            interest rate differential on interest rate swaps is periodized over      A minor part of the cost of supplementary pensions is borne
                            the duration of the swaps on a net basis in interest expenses.         directly by the Parent Company. Annual payments are expensed,
                                                                                                   and pension liabilities are included in the provision for contin-
FINANCIAL STATEMENTS




                                                                                                   gent losses.

                                                                                                   TAXES
                                                                                                   Taxes include taxes for the period calculated on the basis of the
                                                                                                   net result for the period as well as assessed or returned taxes
                                                                                                   for prior periods.




                       90
NOTES TO THE PARENT COMPANY INCOME STATEMENT


EUR million                                             2006             2005        EUR million                                                                          2006           2005


1. OTHER OPERATING INCOME                                                            6. INCOME TAXES

Rental return on real estate                              0.6               0.7      Income taxes for the period                                                           –3.8            –4.6
Gain on sale of non-current assets                        0.0               8.5
Management fees                                           9.7               3.1      Income taxes on ordinary operations                                                    4.2            –0.6
Total                                                    10.3              12.3      Income taxes on extraordinary items                                                   –8.0            –4.0
                                                                                     Total                                                                                 –3.8            –4.6
2. PERSONNEL EXPENSES

Wages and salaries                                        5.0                  4.7
Social expenditure
   Pensions                                               1.4                  0.8   NOTES TO THE PARENT COMPANY BALANCE SHEET
   Other social security                                  0.4                  0.4
Total                                                     6.8                  5.9   7. INTANGIBLE AND TANGIBLE NON-CURRENT ASSETS

The wages, salaries, bonuses and retirement benefits of the President and CEO                                                            Other    Land      Buildings    Machinery         Other
and other members of the Board of Directors are explained on pages 105–107.                                           Intangible   intangible     and            and          and      tangible
                                                                                     EUR million                          rights       assets    water constructions    equipment        assets
3. DEPRECIATION                                                                      Initial cost, January 1, 2006           0.7           0.2     1.2           23.6          2.9           0.6
                                                                                     Additions                               0.2             -       -              -          0.2             -
Depreciation according to plan                                                       Disposals                                 -         –0.1        -            0.0          0.0             -
Intangible rights                                         0.1                  0.1   Balance, December 31, 2006              0.9           0.1     1.2           23.6          3.1           0.6
Buildings and constructions                               0.6                  0.5   Accumulated depreciation,
Machinery and equipment                                   0.1                  0.1   January 1, 2006                         0.3          0.1        -          11.6             2.3          -
Total                                                     0.8                  0.7   Depreciation during the period          0.1          0.0        -           0.6             0.1          -
                                                                                     Balance, December 31, 2006              0.4          0.1        -          12.2             2.4          -
4. FINANCING INCOME AND EXPENSES                                                     Balance sheet value,
                                                                                     December 31, 2006                       0.5            -      1.2          11.4             0.7        0.6
Dividends received from subsidiaries                      4.4              0.0
Other financing income on non-current receivables          0.1              0.1                                                          Other    Land      Buildings    Machinery         Other
Other interest and financing income from subsidiaries     18.5             19.8                                        Intangible   intangible     and            and          and      tangible
Other interest and financing income                        0.4              0.9       EUR million                          rights       assets    water constructions    equipment        assets
Exchange rate gains                                         -              3.4       Initial cost, January 1, 2005           0.5           0.1     1.8           23.7          2.8           0.6
Value adjustments of receivables from subsidiaries          -             –0.5       Additions                               0.2           0.1       -              -          0.1             -
Exchange rate losses                                     –2.8                -       Disposals                               0.0           0.0    –0.6           –0.1          0.0             -
Interest and other financing expenses to subsidiaries     –7.9             –2.1       Balance, December 31, 2005              0.7           0.2     1.2           23.6          2.9           0.6
Other interest and financing expenses                    –19.7            –10.7       Accumulated depreciation,
Total                                                    –7.0             10.9       January 1, 2005                         0.2          0.1        -          11.1             2.2          -
                                                                                     Depreciation during the period          0.1          0.0        -           0.5             0.1          -
5. EXTRAORDINARY ITEMS                                                               Balance, December 31, 2005              0.3          0.1        -          11.6             2.3          -
                                                                                     Balance sheet value,
Group contribution received                              30.8              15.1      December 31, 2005                       0.4          0.1      1.2          12.0             0.6        0.6
Cancellation of the write-doan of loan receivables          -               0.2
Total                                                    30.8              15.3
                                                                                                                                                                                                   91
                            8. INVESTMENTS IN SUBSIDIARIES AT DECEMBER 31, 2006                                        12. ACCUMULATED DEPRECIATION IN EXCESS OF PLAN
                            See note 24 of consolidated financial statements.
                                                                                                                       EUR million                                                                 2006              2005
                                                                                                                       Buildings and constructions                                                  0.6               0.7
                                                                                                                       Machinery and equipment                                                      0.1               0.1
                            9. RECEIVABLES FROM SUBSIDIARIES
                                                                                                                       Total                                                                        0.7               0.8

                            EUR million                                                         2006           2005
                            Accounts receivable                                                  2.3            1.9
                                                                                                                       13. INTEREST-BEARING LONG-TERM LIABILITIES
                            Loans receivable                                                   367.0          385.4
                            Prepaid expenses                                                    32.5           10.3                          Outstanding                      Repayments
                            Total                                                              401.8          397.6                                                                                              2012 and
                                                                                                                       EUR million           Dec. 31, 2006   2007      2008     2009       2010           2011       after
                                                                                                                       Loans from
                            10. PREPAID EXPENSES                                                                       financial institutions         240.5      -         -         -          -      240.5              -
                                                                                                                       Pension loans                   2.3    0.9       0.9       0.5          -          -              -
                                                                                                                       Total                         242.8    0.9       0.9       0.5          -      240.5              -
                            EUR million                                                         2006          2005
                            Prepaid interest                                                     1.5           1.3
                                                                                                                                             Outstanding                      Repayments
                            Other prepaid expenses                                               1.1           1.2                                                                                               2011 and
                            Total                                                                2.6           2.5     EUR million           Dec. 31, 2005   2006      2007     2008       2009           2010       after
                                                                                                                       Loans from
                                                                                                                       financial institutions         249.3      -         -         -          -      249.3              -
                                                                                                                       Pension loans                   3.3    1.0       0.9       0.9        0.5          -              -
                                                                                                                       Total                         252.6    1.0       0.9       0.9        0.5      249.3              -

                            11. SHAREHOLDERS’ EQUITY
                                                                                                                                         Restricted             Retained
                            EUR million                                        Share capital   Share issue     Premium fund             equity, total           earnings                   Total
                            January 1, 2005                                           285.7               -              0.8                   286.5               303.7                   590.2
                            Warrants exercised                                           0.2            0.0              0.5                      0.7                                        0.7
                            Dividend distribution                                                                                                                   –35.7                  –35.7
                            Write-down of revaluation                                                                                                                –0.5                   –0.5
                            Net result                                                                                                                               19.8                   19.8
                            December 31, 2005                                         285.9             0.0              1.3                   287.2                287.3                  574.5
                            Warrants exercised                                          0.9             1.6              4.0                     6.5                                         6.5
FINANCIAL STATEMENTS




                            Dividend distribution                                                                                                                   –35.8                  –35.8
                            Net result                                                                                                                               15.0                   15.0
                            December 31, 2006                                         286.8             1.6              5.3                   293.7                266.5                  560.2




                       92
EUR million                                                            2006           2005    EUR million                          2006    2005

14. INTEREST-BEARING CURRENT LIABILITIES                                                      DERIVATIVE FINANCIAL INSTRUMENTS

Commercial papers                                                     373.6           308.2   Nominal value
Current repayments of long-term loans                                   0.9             1.0   Foreign exchange forward contracts   770.4   781.9
Other interest-bearing current debt                                     6.7            32.5   Forward rate agreements              275.9   200.0
Total                                                                 381.2           341.7   Interest rate swaps                  225.9   277.2

15. PAYABLES TO SUBSIDIARIES                                                                  Fair value
                                                                                              Foreign exchange forward contracts    –2.4    –5.3
Current liabilities                                                   295.7           191.2   Forward rate agreements                0.2     0.1
Accrued liabilities                                                     0.2             0.1   Interest rate swaps                    5.7    –0.1
Total                                                                 295.9           191.3

16. ACCRUED LIABILITIES
Accrued personnel costs                                                  1.8            1.6
Accrued interest                                                         8.0            4.5
Forward contracts’ exchange rate differentials                           2.4            5.3
Other accrued liabilities                                                3.9            4.8
Total                                                                   16.1           16.2

CONTINGENT LIABILITIES

Mortgages pledged
  Pension loans covered                                                  2.3            3.3
  Nominal value of mortgages pledged                                     2.6            3.7

  Other liabilities
  Nominal value of mortgages pledged                                     0.9            0.9
  Total nominal value of mortgages pledged                               3.5            4.6

Guarantees
   Subsidiaries                                                         42.3           23.0
   Others                                                                0.4              -
Total                                                                   42.7           23.0

Operating lease commitments
   Not later than one year                                               0.1            0.1
   Later than one year but not later than five years                      0.1            0.1
Total                                                                    0.2            0.2
There are no guarantees or contingencies given for the management of the Company, for the
shareholders, or for the affiliated companies.




                                                                                                                                                   93
                            SHARES AND SHAREHOLDERS




                            SHARES AND SHARE CAPITAL                                             REDEMPTION OBLIGATION                                             performance, with the aim of distributing a dividend of at least
                            Amer Sports Corporation has one series of shares. The shares         A shareholder whose proportional holding of all the Company’s     one-third of the annual net result.
                            have no par value, but the counter book value of each share is       shares or whose proportional entitlement to votes conferred          Amer Sports Corporation’s Board of Directors will propose
                            EUR 4.00.                                                            by the Company’s shares reaches or exceeds 33¹/³% or 50%          to the Annual General Meeting that a dividend of EUR 0.50 per
                              According to the Articles of Association, the Company’s mini-      is obliged on demand by other shareholders to redeem the          share be paid for fiscal 2006 (2005: EUR 0.50), representing a
                            mum share capital is EUR 200 million and the maximum share           shares of such shareholders, and securities giving entitlement    dividend ratio of 51%. The effective dividend yield is thus 3.0%.
                            capital EUR 800 million. The Company’s paid-in share capital         to them under the Companies Act, in the manner stipulated in      On average, dividends of 46% have been paid out during the
                            recorded in the Trade Register as of December 31, 2006 was           the Articles of Association.                                      past five years.
                            EUR 286,790,496 and the number of shares outstanding was
                            71,697,624.                                                          LISTINGS                                                          WARRANT PROGRAMS
                              The Company’s share capital was increased seven times dur-         Amer Sports shares are listed on the Helsinki Stock Exchange.     As of December 31, 2006, Amer Sports had in use four warrant
                            ing the year. In total, the Company’s number of shares rose by       In addition, the Company has a Level I American Depositary        programs for the purpose of strengthening the commitment of
                            229,914 new shares and the share capital by EUR 919,656.             Receipt (ADR) program on the New York Stock Exchange, which       the Group’s key employees and providing them with an incen-
                            The Amer Sports Corporation shares have been registered within       does not entail SEC reporting (the U.S. Securities and Exchange   tive to focus on the long-term and to increase Amer Sports
                            the book-entry system that is maintained by Finnish Central          Commission). Two depositary receipts are equivalent to one        shareholder value.
                            Securities Depository Ltd (APK). APK is also the keeper of Amer      Amer Sports share.
                            Sports Corporation’s official Shareholder Register.                                                                                     2002 warrant program
                              The right to receive funds distributed by the Company and          AUTHORIZATIONS OF THE BOARD OF DIRECTORS                          On March 21, 2002, the Annual General Meeting approved a
                            subscription rights when the Company raises its share capital        During the report year, the Amer Sports Corporation Board of      warrant program in which a total of 900,000 warrants were is-
                            are held only by parties:                                            Directors did not have valid share issue authorizations or an     sued. The 2003 Annual General Meeting resolved to reduce the
                            • entered as shareholders in the Shareholder Register on the         authorization to issue convertible bonds or bonds with equity     maximum amount of 2002 warrants to 572,500 and to cancel
                               record date,                                                      warrants.                                                         the undistributed 327,500 warrants. The 2004 Annual General
                            • whose right to payment is recorded in the Shareholder Regis-                                                                         Meeting resolved to reduce the maximum amount to 519,100
                               ter and in the book-entry account of the shareholder entered      DIVIDEND POLICY AND DIVIDENDS FOR 2006                            warrants and to cancel the 53,400 warrants that were in the
                               in the Shareholder Register, or,                                  Amer Sports seeks to be viewed as a competitive investment that   possession of the Amer Sports subsidiary Amera Oy.
                            • if the share is nominee-registered, on whose book-entry ac-        increases shareholder value through a combination of dividend       The extraordinary meeting of shareholders on December 13,
                               count the share has been recorded on the record date and          payments and share price performance. Amer Sports pursues         2004 passed a resolution that as a consequence of share sub-
                               whose custodian has been entered as the custodian of the          a progressive dividend policy reflecting the Company’s earnings    scriptions, the Company’s shares outstanding can be increased
                               shares in the Shareholder Register on the record date.
FINANCIAL STATEMENTS




                            INCREASES OF SHARE CAPITAL
                                                                                                Trade Register
                            Warrant                                                           date of increases            Total share
                            programs                EUR               No. of shares            in share capital           capital, EUR       Total no. of shares
                            2002                   69,600                     17,400                 February 7            285,940,440               71,485,110
                            2002                   61,800                     15,450                     July 13           286,002,240               71,500,560
                            2002                  115,800                     28,950              September 7              286,118,040               71,529,510
                            2002                  387,000                     96,750                 October 19            286,505,040               71,626,260
                            2002                   82,800                     20,700              November 24              286,587,840               71,646,960
                            2002                  196,680                     49,170              December 19              286,784,520               71,696,130
                            2003                    5,976                      1,494              December 19              286,790,496               71,697,624

                       94
by a maximum of 1,557,300 new shares and the share capital         2004 passed a resolution that as a consequence of share sub-           As a result of the share subscriptions, the share capital of the
by a maximum of EUR 6,229,200. The share subscription price        scriptions, the Company’s shares outstanding can be increased       company may be increased by a maximum of 500,000 shares,
is a third of the subscription price determined in the terms and   by a maximum of 1,650,000 new shares and the share capital          corresponding to EUR 2,000,000. The share subscription price
conditions, or EUR 10.79 per share.                                by a maximum of EUR 6,600,000. The share subscription price         is EUR 14.86.
   The 2002 warrants were registered within the book-entry sys-    is a third of the subscription price determined in the terms and       The share subscription period will begin on March 1, 2008,
tem in January 2005. The share subscription period commenced       conditions, or EUR 13.53 per share.                                 and end on December 31, 2009. At the close of the report year,
on January 1, 2005 and will end on December 31, 2007. Originally      During the year 2004, 147,001 warrants under the 2004 war-       10 persons were covered by the 2005 warrant program.
warrants were given to 22 persons. At the end of December 2006,    rant program were granted to key employees of the Group in
12 persons were covered by the 2002 warrant program. The stock     accordance with the terms and conditions of the warrants.           General information on warrants
options related to the year 2002 stock option arrangement were        On February 3, 2005, Amer Sports Corporation’s Board of          The issued warrants in question would have corresponded to
subject to trading on the Helsinki Stock Exchange main list as     Directors decided to grant additional warrants under the 2004       4.0% of the Company’s shares and votes as of December 31,
of January 18, 2005.                                               program to key employees of the company. The total number           2006.
                                                                   of warrants granted to key employees rose to 261,650. The              The warrant programs were approved at Amer Sports share-
2003 warrant program                                               additional warrants were transferred because the growth and         holder meetings in the year when each program started. In Amer
In the 2003 warrant program, the number of warrants at the start   profitability targets set by the Board of Directors were achieved.   Sports’ current 2002, 2003 and 2004 warrant programs, one
of the program was 550,000, of which 159,999 warrants were         In accordance with the terms and conditions of the warrants,        warrant entitles its holder to subscribe for three Amer Sports
granted to key employees of the Group in 2003 by decisions of      the 188,350 warrants remaining unexercised were automatically       Corporation shares. In the 2005 warrant program, one warrant
the Board of Directors in accordance with the terms and condi-     cancelled on December 31, 2005.100,000 warrants remain to be        can be exercised to subscribe for one Amer Sports Corporation
tions of the warrants. The 2004 Annual General Meeting passed a    used in connection with possible future acquisitions and other      share. The Company’s Board of Directors decides on the number
resolution to reduce the maximum amount of the 2003 warrants       M&A arrangements. The remainder of the warrants is in the           of warrants to be issued.
to 159,999 and to cancel the undistributed 390,001 warrants.       possession of the Amer Sports subsidiary Amera Oy.                     The warrants issued under all the warrant programs may not
   The extraordinary meeting of shareholders on December 13,          The share subscription period commenced on January 1,            be transferred to a third party or pledged as security before the
2004 passed a resolution that as a consequence of share sub-       2007, and will end on December 31, 2009. Originally warrants        beginning of the share subscription period without the consent
scriptions, the Company’s shares outstanding can be increased      were given to 22 persons. At the end of December 2006, 17           of the Company’s Board of Directors. Warrants will be trans-
by a maximum of 479,997 new shares and the share capital by a      persons were covered by the 2004 warrant program. The stock         ferred automatically to Amera Oy in the event that a warrant
maximum of EUR 1,919,988. The share subscription price is the      options related to the year 2004 stock option arrangement were      holder’s employment or position with Amer Sports comes to
subscription price defined in the terms and conditions divided      subject to trading on the Helsinki Stock Exchange main list as      an end before the start of the share subscription period, as set
by three, or EUR 12.63 per share.                                  of January 2, 2007.                                                 out in detail in the terms and conditions of the warrants. As of
   The share subscription period commenced on January 1,                                                                               December 31, 2006, Amera Oy held 123,550 of the 2004 warrants
2006, and will end on December 31, 2008. Originally warrants       2005 warrant program                                                and 10,000 of the 2003 warrants.
were given to 16 persons. At the end of December 2006, 12          The 2005 warrant program comprises of 500,000 warrants.                Shares subscribed for on the basis of the warrant programs
persons were covered by the 2003 warrant program. The stock          Waiving the pre-emptive subscription right of shareholders,       entitle the shareholder to a dividend for the fiscal year during
options related to the year 2003 stock option arrangement were     the warrants under the 2005 program are granted to the Group        which the subscription was made. Other shareholder rights
subject to trading on the Helsinki Stock Exchange main list as     management of Amer Sports Corporation and Amera Oy, a fully-        commence when the increase in share capital corresponding to
of January 12, 2006.                                               owned subsidiary of Amer Sports Corporation. They will be used      the share subscription has been entered in the Trade Register.
                                                                   as long-term incentives for Group management in 2005-2009 in           The terms and conditions of the warrant programs are posted
2004 warrant program                                               accordance with the growth and profitability targets set by the      on the Amer Sports website at www.amersports.com/investors.
The 2004 warrant program comprises of 550,000 warrants.            Board of Directors. Warrants will be granted to Group manage-
  The extraordinary meeting of shareholders on December 13,        ment after the publication of the 2007 financial statements.



                                                                                                                                                                                                             95
                            SHARES AND WARRANTS HELD BY MANAGEMENT                              last trade in Amer Sports Corporation shares was completed           most active market participants a chance to hear and meet the
                            Amer Sports Board of Directors members held a total of              at a price of EUR 16.68, representing a rise of 6.0% during the      Company’s management.
                            2,082,435 Amer Sports shares as of December 31, 2006 (De-           year. The high for the year on the Helsinki Stock Exchange was         Investor relations are handled in accordance with the Finnish
                            cember 31, 2005: 2,056,910), or 2.9% (2.9%) of the outstanding      EUR 19.00 and the low EUR 14.75. The average share price was         Securities Market Act. The information released must be equal
                            shares and votes.                                                   EUR 16.83.                                                           for all market participants, and all essential information must
                               On December 31, 2006, the President and CEO (also a Board           The Company had a market capitalization at the end of the         be generally available at the same time. The Company observes
                            member) owned 22,500 Amer Sports shares (Dec. 31, 2005:             year of EUR 1,195.9 million. A total of 0.2 million warrants were    a 21 day silent period before releasing each set of financial re-
                            15,500). At the end of 2006, the President held 233,650 warrants,   traded during 2006, to a total value of EUR 4.3 million.             sults, and during this time the Company’s management does
                            entitling him to subscribe for a maximum of 700,950 shares in                                                                            not discuss matters with market participants.
                            the Company. Of these106,800 were under the 2002 warrant            SHAREHOLDERS
                            program, 60,000 under the 2003 warrant program and 66,850           At the close of 2006, Amer Sports Corporation had 14,351 reg-        Trading codes:
                            under the 2004 warrant program. As of December 31, 2006,            istered shareholders. 56.0% (54.7%) of the shares were owned         HEX:                                                  AMEAS
                            the President’s warrants would have corresponded to 1.0% of         by foreigners, or a total of 40.2 million. Each nominee register     Reuters:                                          AMEAS.HE
                            the Company’s shares and votes. Apart from the President, the       is entered in the Share Register as a single shareholder. Only       Bloomberg:                                         AMEAS.FH
                            members of the Company’s Board of Directors do not come             shares that have been recorded in the Shareholder Register have      ADR:                                        AGPDY. 023512205
                            within the scope of the warrant programs.                           the right to vote at general meetings of shareholders.               ISIN:                                          FI0009000285
                               Management of Amer Sports (including President and CEO)
                            owned a total of 42,300 Amer Sports shares on December 31,          SHAREHOLDER AGREEMENTS                                               Key indices:
                            2006 (Dec. 31, 2005: 32,200), representing 0.06% (0.05%) of the     The Company’s Board of Directors is not aware of any agree-          OMX Helsinki
                            shares and votes. At the end of 2006, management owned a total      ments concerning the ownership of the Company’s shares and           OMX Helsinki CAP
                            of 561,367 warrants, entitling them to subscribe for 1,684,101      the use of their voting rights.                                      OMX Helsinki 25
                            shares. Of these, 237,050 were from the 2002 warrant program,                                                                            Consumer Discreationary
                            120,667 from the 2003 warrant program and 203,650 from the          NOTIFICATIONS OF CHANGES IN HOLDINGS
                            2004 warrant program. As of December 31, 2006, the warrants         In January, Franklin Resources Inc. announced that the total
                            held by management would have corresponded to 2.3% of the           number of shares held by the funds and individual investors un-
                            Company’s shares and votes. The Amer Sports management is           der its control represented 5.02% of Amer Sports Corporation’s
                            presented on pages 110–111.                                         share capital and votes. In March, its holding fell below 5% to
                                                                                                4.99%.
                            SHARE TURNOVER AND PRICE TREND
                            During the 2006 calendar year, a total of 66.3 million of the       INVESTOR RELATIONS
FINANCIAL STATEMENTS




                            Company’s shares were traded on the Helsinki Stock Exchange         The objective of Amer Sports investor relations is to provide
                            to a total value of EUR 1,115.2 million. The share turnover was     open and reliable information to investors about the Company’s
                            92.6% in Helsinki. The number of ADR certificates in issue at        financial position and its outlook for the future. To this end, the
                            the turn of the year was 372,886. In 2006, share turnover on the    Company arranges regular meetings with analysts and investors
                            New York Stock Exchange represented only approximately 0.56%        in all the main markets. Mr Tommy Ilmoni, Vice President of In-
                            of total Amer Sports share turnover.                                vestor Relations is in charge of investor relations. The Company
                               At the close of the year on the Helsinki Stock Exchange, the     furthermore arranges annual Capital Market Days offering the




                       96
WARRANT PROGRAMS                                                                                                                       Increase of share
                                                              Number of staff,                     Subscription      No. of warrants       capital at the
Warrant programs                              Year of issue     Dec. 31, 2006 Subscription ratio     price, EUR               issued        most, euros     Subscription period of shares
2002                                         2002 and 2003                 12                1:3           10.79             519,100           6,229,200       Jan. 1, 2005–Dec. 31, 2007
2003                                                   2003                12                1:3           12.63             159,999           1,919,988       Jan. 1, 2006–Dec. 31, 2008
2004                                         2004 and 2005                 17                1:3           13.53             361,650           4,339,800       Jan. 1, 2007–Dec. 31, 2009
2005                                                   2005                10                1:1           14.86                               2,000,000       Mar. 1, 2008–Dec. 31, 2009



MAJOR SHAREHOLDERS AT DECEMBER 31, 2006


                                                                                         Shares    % of shares and votes
The Land and Water Technology Foundation                                               3,300,000                      4.6
Brotherus Ilkka                                                                        2,003,230                      2.8
Varma Mutual Pension Insurance Company                                                 1,397,350                      1.9
Ilmarinen Mutual Pension Insurance Company                                             1,334,175                      1.9
Odin Norden                                                                            1,126,000                      1.6
Tapiola Mutual Pension Insurance Company                                                 968,700                      1.4
The State Pension Fund                                                                   870,000                      1.2
Etera Mutual Pension Insurance Company                                                   800,721                      1.1
Odin Forvaltning AS/Odin Europa SMB                                                      634,952                      0.9
OP-Delta Mutual Fund                                                                     577,950                      0.8
Odin Forvaltning AS                                                                      492,661                      0.7
Tapiola General Mutual Insurance Company                                                 401,805                      0.6
OP Finland Fund                                                                          350,000                      0.5
Finnish Cultural Foundation                                                              350,000                      0.5
Amer Cultural Foundation                                                                 297,771                      0.4
Tapiola Mutual Life Assurance Company                                                    271,310                      0.4
Mutual Fund Evli Select                                                                  247,744                      0.3
Pension Fund Polaris                                                                     236,615                      0.3
Nordea Fennia Fund                                                                       235,770                      0.3
Sampo Finnish Equity Fund                                                                232,050                      0.3

Nominee registrations                                                                 37,725,401                    52.6




                                                                                                                                                                                            97
                            SHAREHOLDINGS AND WARRANTS OF INSIDERS AT DECEMBER 31, 2006

                                                                                                                    Shares                          2002 warrants   2003 warrants   2004 warrants
                            Board of Directors *)
                            Anssi Vanjoki, Chairman                                                                  5,286                                      -               -               -
                            Ilkka Brotherus, Vice Chairman                                                       2,003,230                                      -               -               -
                            Felix Björklund                                                                         36,923                                      -               -               -
                            Tuomo Lähdesmäki                                                                         8,423                                      -               -               -
                            Timo Maasilta                                                                            6,073                                      -               -               -
                            Roger Talermo, President and CEO                                                        22,500                                106,800          60,000          66,850

                            Management
                            Max Alfthan, Communications                                                               1,200                                 8,000           8,000          11,150
                            Eero Alperi, Supply Chain Development                                                     3,000                                14,000           6,000           5,950
                            Chistel Berghäll, Human Resources                                                           350                                     0               0           5,950
                            Paul Byrne, President, Precor                                                                 0                                20,000               0          17,850
                            Chris Considine, President, Wilson                                                            0                                     0          10,000          17,850
                            Jean-Luc Diard, President, Salomon                                                            0                                     0               0               0
                            Thomas Henkel, Information Technology                                                         0                                     0               0               0
                            Tommy Ilmoni, Investor Relations                                                          1,000                                     0               0               0
                            Kari Kauniskangas, Sales & Distribution                                                   1,650                                15,000           6,667          22,300
                            Heikki Koponen, Legal Affairs **)                                                             0                                     0               0           5,950
                            Pekka Paalanne, Finance                                                                  12,300                                32,600          16,000          26,000
                            Juha Pinomaa, President, Suunto                                                               0                                     0               0               0
                            Michael Schineis, President, Atomic                                                           0                                33,400          10,000          17,850
                            Kai Tihilä, Business Planning & Control                                                     300                                 7,250           4,000           5,950

                            Auditor
                            Göran Lindell                                                                                  0                                    -               -               -

                            TOTAL                                                                                2,102,235                                237,050         120,667         203,650

                            *)
                                 The members of the Board of Directors, excluding the President and CEO, are not covered by the warrant programs.
                            **)
                                  The employment contract was terminated in January 19, 2007.
FINANCIAL STATEMENTS




                       98
NUMBER OF SHARES PER SHAREHOLDER AT DECEMBER 31, 2006                                                                                                 SHAREHOLDING IN AMER SPORTS CORPORATION
                                                                                                                                                      DEC. 31, 2006

                                                                % of share-                                                                           1   OUTSIDE FINLAND AND NOMINEES                56%
                                                 Shareholders      holders           Shares          % of shares                                      2   HOUSEHOLDS                                  16%
1–100                                                   3,098          21.6          181,235                  0.3                                     3   NON-PROFIT ORGANIZATIONS                     9%
101–1,000                                               8,645          60.2        3,520,014                  4.9                                     4   BANKS AND INSURANCE COMPANIES                9%
                                                                                                                                                      5   PRIVATE COMPANIES                            6%
1,001–10,000                                            2,372          16.5        6,106,893                  8.5
                                                                                                                                                      6   PUBLIC SECTOR ENTITIES                       4%
10,001–100,000                                            184           1.3        5,204,987                  7.3
over 100,000                                               38           0.3       18,959,094                 26.4
Nominee registrations                                      14           0.1       37,725,401                 52.6                                                               5 6
                                                                                                                                                                           4
Total                                                  14,351         100.0       71,697,624                100.0
                                                                                                                                                                       3
                                                                                                                                                                                               1
                                                                                                                                                                           2

      TRENDS OF SHARE PRICES

         Amer Sports              OMX Helsinki CAP

250



200



150



100



50



 0

               2002                          2003                 2004                        2005                  2006




             TRADING OF SHARES                                                         TRADING OF SHARES                                                  MARKET CAPITALIZATION
             million shares                                                            1,000 shares                                                       DEC. 31, EUR million

                                                                              10,000

                                                                                                                                                                                              1,196
                                                                               8,000                                                                                                  1,124
                                          66.3

                                   56.1                                                                                                                                    918
                    52.9                                                       6,000                                                                       811   807
                           50.2
             44.7

                                                                               4,000


                                                                               2,000


                                                                                                                                                           02    03            04      05      06
             02     03     04      05     06                                      0

                                                                                       1/06                                12/06




                                                                                                                                   For more detailed information please visit www.amersports.com.


                                                                                                                                                                                                            99
                             SHARE CAPITAL AND PER SHARE DATA



                                                                                                                   IFRS                             FAS
                             EUR million                                                    2006         2005             2004     2003     2003           2002
                             Share capital                                                 286.8         285.9            285.7     97.8     97.8           96.8
                             Number of shares in issue, million                             71.7          71.5             71.4     73.4     73.4           72.6
                             Adjusted number of shares in issue less own shares,
                             million                                                        71.7          71.5             71.4     70.5     70.5           69.6
                             Adjusted average number of shares in issue less own
                             shares, million                                                71.5          71.4             71.1     70.0     70.0           69.6
                             Share issues
                                Bonus issue                                                    -              -           190.5        -        -              -
                                Targeted share issue                                         0.9            0.2             1.3      1.0      1.0            0.3
                             Decrease of share capital                                         -              -             3.9        -        -              -
                             Earnings per share, continuing operations, EUR                 0.98           1.05            0.96     1.12     0.92           0.98
                             Earnings per share, continuing operations, diluted, EUR        0.97           1.04            0.96     1.11     0.92           0.97
                             Earnings per share, discontinued operations, EUR                  -              -            0.20        -        -              -
                             Earnings per share, discontinued operations, diluted, EUR         -              -            0.20        -        -              -
                             Equity per share, EUR                                          7.71           7.46            6.41     5.95     6.31           6.39
                             Total dividends                                                36.0 1)        35.7            35.7     33.0     33.0           32.6
                             Dividend per share, EUR                                        0.50 1)        0.50            0.50     0.47     0.47           0.47
                             Dividend % of earnings                                           51 1)          48              43       42       51             48
                             Effective yield, %                                              3.0 1)         3.2             3.9      4.1      3.9            4.0
                             P/E ratio                                                      17.0           14.9            11.1     10.3     12.4           11.8
                             Market capitalization                                       1,195.9        1,124.2           917.7    806.7    806.7          810.6
                             Share value, EUR
                                Counter book value                                          4.00          4.00             4.00     4.00     4.00           4.00
                                Share price low                                            14.75         12.32            11.49     8.68     8.68           8.61
                                Share price high                                           19.00         17.09            14.82    12.17    12.17          13.33
                                Average share price                                        16.83         14.65            13.06    10.02    10.02          10.49
                                Share price at closing date                                16.68         15.73            12.85    11.45    11.45          11.63
                             Trading volume                                              1,115.2         822.1            656.1    530.7    530.7          469.5
                                1,000s                                                    66,251        56,119           50,232   52,872   52,872         44,709
                                %                                                             93            79               71       75       75             62
FINANCIAL STATEMENTS




                             Number of shareholders                                       14,351        14,588           13,493   12,314   12,314         10,689

                             1)
                                  Proposal of the Board of Directors for 2006
                             The comparison figures for 2002–2003 have been adjusted for the December 2004 bonus issue.
                             Calculation of key indicators, see page 87.




                       100
BOARD OF DIRECTORS REPORT’S AND FINANCIAL                           AUDITORS’ REPORT
STATEMENTS’ SIGNATURES

                                                                    TO THE SHAREHOLDERS OF AMER SPORTS CORPORATION

                                                                    We have audited the accounting records, the financial statements, the report of the Board of Directors
                                                                    and the administration of Amer Sports Corporation for the period 1.1.–31.12.2006. The Board of Direc-
                                                                    tors and the President and CEO have prepared the consolidated financial statements, prepared in ac-
                                                                    cordance with International Financial Reporting Standards as adopted by the EU, as well as the report
Helsinki, February 13, 2007
                                                                    of the Board of Directors and the parent company’s financial statements, prepared in accordance with
                                                                    prevailing regulations in Finland, containing the parent company’s balance sheet, income statement,
                                                                    cash flow statement and notes to the financial statements. Based on our audit, we express an opinion on
                                                                    the consolidated financial statements, as well as on the report of the Board of Directors and the parent
Anssi Vanjoki                 Ilkka Brotherus   Felix Björklund     company’s financial statements and administration.
                                                                       We conducted our audit in accordance with Finnish Standards on Auditing. Those standards require
                                                                    that we perform the audit to obtain reasonable assurance about whether the report of the Board of Direc-
                                                                    tors and the financial statements are free of material misstatement. An audit includes examining on a
Tuomo Lähdesmäki              Timo Maasilta     Roger Talermo       test basis evidence supporting the amounts and disclosures in the report of the Board of Directors and
                                                President and CEO   in the financial statements, assessing the accounting principles used and significant estimates made
                                                                    by the management, as well as evaluating the overall financial statement presentation. The purpose of
                                                                    our audit of the administration is to examine whether the members of the Board of Directors and the
                                                                    President and CEO of the parent company have complied with the rules of the Companies’ Act.

                                                                    CONSOLIDATED FINANCIAL STATEMENTS
                                                                    In our opinion the consolidated financial statements, prepared in accordance with International Financial
                                                                    Reporting Standards as adopted by the EU, give a true and fair view, as defined in those standards and in the
                                                                    Finnish Accounting Act, of the consolidated results of operations as well as of the financial position.

                                                                    PARENT COMPANY’S FINANCIAL STATEMENTS, REPORT OF THE BOARD OF DIRECTORS AND
                                                                    ADMINISTRATION
                                                                    In our opinion the parent company’s financial statements have been prepared in accordance with the
                                                                    Finnish Accounting Act and other applicable Finnish rules and regulations. The parent company’s
                                                                    financial statements give a true and fair view of the parent company’s result of operations and of the
                                                                    financial position.
                                                                       In our opinion the report of the Board of Directors has been prepared in accordance with the Finnish
                                                                    Accounting Act and other applicable Finnish rules and regulations. The report of the Board of Directors
                                                                    is consistent with the consolidated financial statements and the parent company’s financial statements
                                                                    and gives a true and fair view, as defined in the Finnish Accounting Act, of the result of operations and
                                                                    of the financial position.
                                                                       The consolidated financial statements and the parent company’s financial statements can be adopted
                                                                    and the members of the Board of Directors and the President and CEO of the parent company can be
                                                                    discharged from liability for the period audited by us. The proposal by the Board of Directors regarding
                                                                    the disposal of distributable funds is in compliance with the Companies’ Act.

                                                                    Helsinki, 13 February 2007

                                                                    PricewaterhouseCoopers Oy
                                                                    Authorised Public Accountants

                                                                    Göran Lindell
                                                                    Authorised Public Accountant
                                                                                                                                                                                   101
      CORPORATE GOVERNANCE


      The keystones of Amer Sports Corporation’s corporate governance are high-caliber administra-
      tion, transparency and effective communications. The company observes the recommendations
      on corporate governance of listed companies issued by the Helsinki Stock Exchange, the Central
      Chamber of Commerce and the Confederation of Finnish Industries EK.



                                         Amer Sports is listed on the Helsinki Stock Exchange and is          of Association do not stipulate to be decided or performed by
                                         therefore subject to Finnish corporate governance recommenda-        other bodies. The Board of Directors is responsible for attend-
                                         tions. The purpose of these recommendations is to harmonize          ing to the administration of the company and duly organizing its
                                         the practices of listed companies and the information provided       operations. The Board of Directors must act in the company’s
                                         to shareholders, as well as improve the transparency of their        interests in all circumstances. The Board of Directors has set
                                         operations and their quality of disclosure.                          as its goal guiding the company’s operations with a view to
                                                                                                              generating maximum enduring added value to shareholders
                                         GENERAL MEETING                                                      without neglecting other interest groups.
                                         Amer Sports Corporation’s highest power of authority is exer-           The Board of Directors draws up an annual plan and each
                                         cised by the company’s shareholders at the General Meeting,          year assesses its own activities by carrying out an internal
                                         which is convened by the company’s Board of Directors. Share-        self-appraisal. All matters of wide-ranging importance for the
                                         holders can exercise their right to make decisions concerning the    company’s operations are dealt with by the Board of Directors.
                                         company at a properly-convened General Meeting by either being          A decision of the Board of Directors must be supported by
                                         present themselves or through authorized representatives.            more than half of the members present. When voting is split,
                                            In addition to the matters specified as being the business of      the Chairman has the deciding vote.
                                         Annual General Meetings, as set forth in the Finnish Companies          The Board of Directors convenes at least once a year when
                                         Act, a shareholder can submit a written request to the Amer          representatives of the company’s management are not in at-
                                         Sports Board of Directors that a certain matter be dealt with at     tendance.
                                         the General Meeting. The written request must be submitted              The major tasks of the Board of Directors are to:
                                         to the Board of Directors early enough that the matter can be
                                         included in the Notice of Meeting. The Board of Directors must       Direct Amer Sports business operations and strategies
                                         convene a General Meeting without delay to deliberate on a           • Confirm the company’s strategy and ensure that it is up to
                                         certain matter if requested by the auditor or a shareholder or          date
                                         shareholders owning at least 10% of all the company shares.          • Confirm the business plan on the basis of its strategy, annual
                                                                                                                 budget and monitor its achievement
                                         DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS                • Adopt the annual investment plan
                                         The duties and responsibilities of the Amer Sports Board of          • Decide on significant, strategically important investments or
                                         Directors are defined on the basis of the Finnish Companies              acquisitions and the sale of assets
                                         Act and other applicable legislation. The Board of Directors has
                                         general authority in all such matters that the law or the Articles




102
Organization of Amer Sports administration and functions          The Board of Directors prepares an annual                          Nomination Committee
• Appoint and dismiss the President and CEO                       plan that always extends until the subsequent                      The Nomination Committee prepares proposals on Board
• Appoint and dismiss the immediate subordinates of the           Annual General Meeting, which includes:                            members and their compensation for discussion by the Board of
  President and CEO                                               • the schedule of meetings                                         Directors and presentation for a resolution of the Annual General
• Decide on the terms of employment of the President and CEO      • the major issues to be discussed at each meeting                 Meeting. The Chairman of the Nomination Committee discusses
  and his immediate subordinates, including incentive reward      • the schedule of the dates when the Board members are to          the proposals with the largest shareholders. The Nomination
  programs, if any                                                   familiarize themselves with the operations of the company       Committee comprises three non-executive members of the
• Set the CEO’s personal targets for each year and monitor           and its partners, as well as                                    Board of Directors. In 2006 they were: Ilkka Brotherus (Chair-
  their achievement                                               • the annual evaluation of its own performance at the end of       man of the Committee), Timo Maasilta and Felix Björklund. The
• Keep track of issues related to succession in management           the period                                                      Committee convened five times in 2006. The attendance rate of
• Adopt the duties and responsibilities of the Board and evalu-                                                                      members at meetings was 100% in 2006.
  ate its performance once a year                                 Chairman of the Board
                                                                  According to Board procedures, the Chairman of the Board, in       Compensation Committee
Supervision of financial administration and                        addition to leading the work of the Board, continuously monitors   The task of the Compensation Committee is to prepare proposals
risk management                                                   the Group’s operations and development through contact with        for decisions on the compensation and reward system for mem-
• Approve interim reports, annual reports and financial state-     the President and CEO. The Chairman of the Board ensures           bers of the Amer Sports top management. The Compensation
   ments                                                          that the work of the Board is evaluated annually, and that the     Committee comprises of three non-executive Directors: Anssi
• Hold a meeting with the company’s auditors at least once a      Board continuously updates and deepens its knowledge of the        Vanjoki (Chairman of the Committee), Felix Björklund and Tuomo
   year                                                           Group’s operations.                                                Lähdesmäki. The Committee convened three times in 2006. The
• Supervise significant risks connected with the company’s           In 2006 Anssi Vanjoki acted as Chairman and Ilkka Brotherus      attendance rate of members at meetings was 100% in 2006.
   operations and risk management                                 as Vice Chairman of the Board.
                                                                                                                                     Audit Committee
Preparation of matters to be decided on at an                     BOARD COMMITTEES                                                   The task of the Audit Committee is to assist the Board of Direc-
Annual General Meeting                                            The Board of Directors has set three permanent committees          tors in the monitoring of the reporting and accounting processes.
• Draft the company’s dividend payout policy and submit a         from amongst its members and has defined rules of procedure         In order to fulfill its task, the committee assesses compliance
   proposal on the dividend to the General Meeting                for them. The committees report on their work to the entire        with laws and regulations and supervises the company’s financial
• Submit other proposals to the General Meeting                   Board of Directors on a regular basis.                             situation. “Reporting” refers to financial statements, interim




                                                                                                                                                                                                         103
      reports and monthly profit-and-loss reporting. The committee            The Board of Directors meets once a month as a rule. In 2006,     Executive Board
      evaluates the adequacy and appropriateness of internal control      the Board of Directors convened 13 times. While most meetings        The Amer Sports Executive Board comprises of the Executive
      and risk management. The committee prepares the auditor             of the Board were held at Amer Sports headquarters in Helsinki,      Team and the Presidents of the business segments. In addition
      selection decision that is made at the General Meeting of the       some meetings were arranged elsewhere in connection with vis-        to the Amer Sports President, who is the Chairman, there are
      parent company and maintains contact with the auditor. Three        its by the Directors to familiarize themselves with the operations   eight other Executive Board members, who are presented on
      non-executive Directors sit on the Audit Committee. In 2006 they    of Amer Sports. The attendance rate of Directors at meetings of      pages 110–111. The Executive Board meets three times a year.
      were: Tuomo Lähdesmäki (Chairman of the Committee), Ilkka           the Board was 98.9% in 2006.                                         Its task is to insure that the Group’s strategy is implemented
      Brotherus and Timo Maasilta. The Committee convened four                                                                                 consistently across all business areas.
      times in 2006. The attendance rate of members at meetings           MANAGEMENT DUTIES AND RESPONSIBILITIES
      was 91.7% in 2006.                                                  President and CEO                                                    Business Segment Boards
                                                                          The Board nominates the President and CEO, who is in charge          Each business segment – Salomon, Wilson, Precor, Atomic and
      ELECTION AND TERMS OF OFFICE OF BOARD MEMBERS                       of managing Amer Sports in accordance with the Finnish               Suunto – has a Board of Directors, which comprises of Amer
      The Board of Directors is responsible for duly organizing the       Companies Act and instructions provided by the Board. Roger          Sports President and CEO Roger Talermo, Amer Sports CFO
      administration and operations of Amer Sports. The Annual            Talermo has served as President and CEO since 1996 and as a          Pekka Paalanne, and the President of the business in question.
      General Meeting elects a minimum of five and a maximum of            Board member since 1996. Senior Vice President and CFO Pekka         The Business Segment Boards are responsible for both strategic
      seven Directors for a term of one year. A person who has reached    Paalanne acts as deputy to the President and CEO.                    and operational management. The specific responsibilities of
      the age of 66 at the time of election may not become a member          The President and CEO reports to the Board and keeps the          the Segment Boards are defined by the Amer Sports President
      of the Board of Directors. Terms of office are not otherwise re-     Board informed about the Amer Sports business environment            and CEO. The Business Segment Boards meet on average six
      stricted. The Board of Directors elects from among its number       – including the markets and Amer Sports competitors – as well        times a year.
      a Chairman and a Vice Chairman.                                     as the financial position of Amer Sports and other significant
         The Board’s Nomination Committee prepares a proposal on          matters. The President and CEO implements the decisions              AUDIT
      the members of the Board. The composition of the Board must         made by the Board and its committees. The President and CEO          PricewaterhouseCoopers is generally responsible for auditing
      be in line with the company’s size, market position and industry,   guides and supervises the operations of Amer Sports and its          the Group companies worldwide. The independent public ac-
      and the Directors must have the requisite expertise concerning      business segments.                                                   countants of Amer Sports Corporation, PricewaterhouseCoopers
      Amer Sports’ line of business and international operations.                                                                              Oy, are in charge of directing and coordinating the audit work
         The members of the Board of Directors for the 2006 term          Executive Team                                                       for the entire Group. The principal auditor is Göran Lindell, Au-
      of office were Anssi Vanjoki (Chairman), Ilkka Brotherus (Vice       Amer Sports Executive Team, together with the headquarters           thorized Public Accountant. The Annual General Meeting elects
      Chairman), Felix Björklund, Tuomo Lähdesmäki, Timo Maasilta         management, assists and supports the President and CEO. The          Amer Sports’ auditor annually for a one year period.
      and Roger Talermo (President and CEO). Of the six members           Executive Team comprises of the President and CEO along with            The scope and content of the audit reflects the fact that Amer
      for the term of office, one was the Amer Sports President and        Pekka Paalanne, Senior Vice President & CFO, Max Alfthan,            Sports does not have a separate internal audit organization.
      CEO and the other five members were non-executive expert             Senior Vice President, Corporate Communications, and Kari            The auditors examine the efficiency of the company’s systems,
      members who were not employed by the company. Senior Vice           Kauniskangas, Senior Vice President, Sales & Distribution. The       internal control, reporting and accounting. The Audit Commit-
      President & CFO Pekka Paalanne acted as secretary to the            Executive Team meets whenever requested or required.                 tee and the Group’s financial management, together with the
      Board. Members of the Board of Directors are presented in more                                                                           auditors, determine one or more audit themes over and above
      detail on pages 108–109.




104
the statutory auditing requirements. The themes change each           Additional compensation is not paid for meetings or work as a          program seeks to provide long-term incentives for corporate
year, and separate reports on them are prepared for Group             committee member.                                                      management in 2005–2009 in accordance with the growth
management. This insures that Amer Sports operations are                In 2006, the members of the Board of Directors were paid total       and profitability targets set by the Board of Directors. The
efficient and profitable, that information is reliable, and that the    compensation of EUR 0.18 million, of which EUR 0.108 million           warrants, if any, will be granted to corporate management
relevant rules and operating principles are observed.                 was in cash. The following shares were transferred: Anssi Van-         after the publication of 2007 financial statements.
   Amer Sports Corporation’s auditors, the Presidents of the          joki, 1,157 shares, Ilkka Brotherus, 926 shares, Felix Björklund,    – A deferred cash incentive program that seeks to elicit com-
business areas, and the Presidents and CFOs of the largest            694 shares, Tuomo Lähdesmäki, 694 shares and Timo Maasilta,            mitment from key employees. The program encourages
subsidiaries meet together at least once a year. The President        694 shares. The President and CEO is not paid an emolument             the achievement of the annual plan. Its result is tied to the
and the CFO of each subsidiary meet with the local auditor at         for his work as a member of the Board.                                 three-year trend in shareholder value. In 2006, 94 members
least twice a year.                                                                                                                          in management tasks at subsidiaries came within the scope
   The auditors of subsidiaries present their audit observations      Management salaries and compensation                                   of the program.
annually to the company in question, to the auditors of Amer          The salaries and compensation paid to the President and his
Sports Corporation, and to the Group’s financial management.           immediate subordinates are decided by the Board of Directors.        The salaries, benefits and other compensation paid to the mem-
In addition, they report in greater detail to the subsidiaries con-   The Board’s Compensation Committee is responsible for prepar-        bers of the Amer Sports Board of Directors, the President and
cerning observations made in the course of the audit.                 ing proposals to the incentive system. No separate compensa-         CEO and the Executive Board amounted to approximately EUR
   The auditors submit a written report on their audit to the Board   tion is paid to management members for their participation in        4.92 million in 2006. Total compensation paid to the President
of Directors once a year. The principal auditor takes part in the     management bodies.                                                   and CEO in 2006 was EUR 1.04 million, of which incentives tied
Board of Directors meeting at which the financial statements              In 2006, the management incentive system consisted of the         to profits and other objectives accounted for EUR 0.3 million.
for the fiscal year are discussed and presents a summary of            following components:                                                Salaries, benefits and other compensation paid to the other
the year’s audit.                                                     • An annual incentive system for key employees, which is tied        members of the Amer Sports Executive Board totaled EUR 3.7
                                                                          to achievement of a unit’s business strategy and annual plan.    million, of which incentives amounted to EUR 1.2 million.
SALARIES AND OTHER COMPENSATION                                           The purpose of the annual incentive system is to drive the          The Amer Sports warrant programs for the years 2002, 2003,
Board of Directors Compensation                                           company’s growth and profitability and to support the real-       2004 and 2005 are presented on pages 94–95. At the end of 2006,
The Annual General Meeting passes a resolution on the compen-             ization of company strategy. The annual incentive system is      the President and CEO held warrants entitling him to a total of
sation paid to members of the Board of Directors each year. The           the most extensive incentive system in terms of personnel        700,950 shares. Of these, 320,400 were under the 2002 warrant
Annual General Meeting held in March 2006 resolved to set the             covered.                                                         program, 180,000 under the 2003 program and 200,550 under
annual emolument of the Chairman of the Board at EUR 50,000,          • Long-term incentive programs for key employees                     the 2004 program. Apart from the President, the members of the
the Vice Chairman at EUR 40,000 and the emoluments of other           – Warrant programs designed to support the achievement of            Amer Sports Board of Directors do not come within the scope
members at EUR 30,000. The emoluments of Board members                    long-term strategic objectives and to build shareholder value.   of the warrant programs.
consist of a 40% component paid in Amer Sports’ shares and                The number of people in management and expert tasks within
60% in cash. A member of the Board of Directors is not allowed            the parent company and its subsidiaries who came within the      CEO’s executive agreement
to sell or transfer said shares during his or her directorship.           scope of warrants at the end of 2006 was 12 under the 2002       The terms and conditions of the President and CEO’s employ-
The restriction on sale and transfer is nevertheless in effect            program, 12 under the 2003 program, 17 under the 2004            ment are defined in a written executive agreement that has been
for a maximum of five years from the acquisition of the shares.            program and 10 under the 2005 program. The 2005 warrant          approved by the Board of Directors. Under the agreement, the




                                                                                                                                                                                                             105
      President can take early retirement at the age of 60, with pension   RISK MANAGEMENT                                                        In addition, Amer Sports’ most important distribution cen-
      payable at a 60 percent salary rate. The other Board of Directors    Once a year, the Board of Directors analyzes risks connected         ters are located in Germany, Austria, the United States and
      members do not have pension agreements with the company.             with Amer Sports’ operations.                                        France.
        The President and CEO’s period of notice is six months on both        Responsibility for the risk management related to line opera-       The main raw materials used in production are steel, vari-
      the company’s and the President’s side. Should Amer Sports give      tions rests with the Amer Sports’ business areas, which report       ous plastic products, carbon fiber, rubber, leather and various
      the President notice, he is to be paid salary for the duration of    regularly on the main risks connected with their operations to       high-quality fabrics.
      the notice period and severance pay of 24 months’ fixed salary.       the business area’s Board of Directors.                                A characteristic feature of the sporting goods industry is
      The other Board members do not have a notice period and do              The property, loss-of-profits and liability risks arising from     the need to protect intellectual property rights and disputes
      not receive severance pay.                                           Amer Sports’ operations are covered by taking out the appropri-      connected with them. The material impacts on Amer Sports’
                                                                           ate insurance policies. In addition to worldwide insurance pro-      financial position and operational result arising from the busi-
      Compensation of auditors                                             grams, local policies are used to supplement cover, for example,     ness areas’ pending litigation and decisions of the authorities
      In 2006, Amer Sports paid PricewaterhouseCoopers total fees          when there are special legislation-related needs.                    are assessed regularly and current estimates are presented
      of approximately EUR 2.1 million worldwide. Approximately EUR           The management of financial risks is centralized within the        publicly when necessary.
      1.8 million of this sum was for the statutory audit. About EUR       parent company’s Group Treasury function. The guidelines for
      0.3 million was spent on other services.                             risk management are set out in the financing strategy, which is       INSIDERS
                                                                           approved by the Board of Directors and encompasses the prin-         Amer Sports’ insider policy is based on the Guidelines for Insid-
      FINANCIAL REPORTING                                                  ciples and risk limits connected with the balance sheet structure,   ers of the Helsinki Stock Exchange and the Securities Market
      Amer Sports prepares its financial statements and interim             relations with finance providers and other financing risks. In addi-   Act, as amended on July 1, 2005.
      reports in accordance with International Financial Reporting         tion, corporate headquarters has a financing group that monitors         The members of the Board of Directors, the President and CEO
      Standards (IFRS) and publishes them in Finnish and English.          implementation of the financing strategy. Amer Sports’ treasury       and the Vice President as well as the auditors are Amer Sports
         Amer Sports’ primary reporting segments are its business          management agrees with the business areas and subsidiaries on        public insiders. Furthermore, members of management are also
      segments: Salomon, Wilson, Precor, Atomic and Suunto. Salo-          application of financing principles. The management of financial       public insiders. They are presented on page 111.
      mon is divided into the following business areas: Winter Sports      risks is presented in greater detail on pages 85–86.                    Persons who are in charge of Amer Sports finances, results
      Equipment, Apparel and Footwear, and Mavic. Wilson’s business           A large part of Amer Sports’ production is outsourced. The        reporting and communications as well as senior management’s
      areas are Racquet Sports, Team Sports, and Golf. Net sales           business areas use a number of different suppliers, and strive       secretaries and the principal users of the IT system are included
      figures are reported for these business areas. Geographical           to establish long-term cooperation with them. The aim is to          in the company-specific register of insider holdings. Similarly,
      segments are secondary reporting segments: the Americas              minimize the supply, quality and price risks associated with         other persons who are responsible for key company operations
      (including Latin America), EMEA (Europe, the Middle East, Africa)    purchasing. The business areas audit major and new suppliers         and regularly receive insider information in the course of their
      and Asia (including Japan and Australia).                            before undertaking cooperation with them and continue to do          duties are included in the company-specific register of insider
         In overseeing the operations of the business areas, the Presi-    so regularly thereafter.                                             holdings.
      dent and CEO and other Group management make use of weekly              The most important of Amer Sports’ own production facilities         If a person has inside information, they may not issue com-
      sales reports, monthly financial reports, and regular meetings        are the Atomic factory in Austria, Precor’s factory in the United    missions concerning the purchase, sale, etc. of Amer Sports
      with the business segments.                                          States, the Suunto factory in Finland as well as Salomon’s factory   securities or directly or indirectly advise another person in such
         At all meetings of the Board of Directors, the company’s man-     in France. In addition, Salomon has major factories in Romania       transactions. An insider may not trade in Amer Sports securities
      agement deliberates on the financial surveys of the business          that are owned by subcontractors and whose production equip-         during the 21 days that precede the publication of an interim
      operations of both Amer Sports and the reporting segments.           ment and inventories are owned by Salomon.                           or annual report.



106
   Insider policy also includes provisions prohibiting the tempo-      SALARIES, BENEFITS AND INCENTIVES IN 2006
rary trade of shares. Persons who are party to the preparation
of a project or are aware of a confidential project which, when         EUR                                                               Salaries and compensation                      Incentives                    Total
implemented, is likely to have a substantial impact on the value       Members of the Board of Directors *)**)
of the Amer Sports securities, are project-specific insiders.             Anssi Vanjoki                                                                       50,000
Similarly, any persons outside the company who in the course of          Ilkka Brotherus                                                                     40,000
their duties or otherwise acquire the aforementioned information         Felix Björklund                                                                     30,000
are included in the project-specific register of insider holdings.        Tuomo Lähdesmäki                                                                    30,000
Amer Sports defines on a case-by-case basis the projects under            Timo Maasilta                                                                       30,000
preparation that are subject to insider rules.                         President and CEO Roger Talermo **)                                                  692,782                        345,210               1,037,992
   The Amer Sports Vice President of Legal Affairs acts as the         Other members of the Executive Board ***)                                          2,547,494                      1,188,641               3,736,135
insider compliance officer and is responsible for the due dis-          *)
                                                                            Members of the Board of Directors are not paid incentives.
closure of information on insider matters. The Vice President of       **)
                                                                        The emoluments of Board members consist of a 40% component paid in Amer Sports’ shares and 60% in cash. The President and CEO is not paid an emolu-
Legal Affairs also sees to the maintenance of the insider register.    ment and fees for serving as member of the board.
Amer Sports keeps its insider register within the SIRE system          ***)
                                                                              Members of the Executive Board Roger Talermo, Pekka Paalanne and Kari Kauniskangas have an early retirement agreement.
operated by Finnish Central Securities Depository Ltd.
   Amer Sports insider policy is made available to employees in
the corporate internet. The list of public insiders as well as their   SHAREHOLDING AND WARRANTS AT DECEMBER 31, 2006
shareholdings in the company can be found on the Amer Sports
website at www.amersports.com/investors.
                                                                                                                     Members of the
                                                                       Pcs                                         Board of Directors           President and CEO           Other management                         Total
INFORMATION AND COMMUNICATION                                          Shares                                               2,059,935                       22,500                     19,800                    2,102,235
Amer Sports has information and communication channels that            Warrants 2002                                                -                      106,800                    130,250                      237,050
ensure that instructions and manuals are available to those            Warrants 2003                                                -                       60,000                     60,667                      120,667
who need access to them, and that information about news and           Warrants 2004                                                -                       66,850                    136,800                      203,650
updates is communicated within the Group.                              Warrants 2005                                                -                            -                          -                            -

                                                                       The shareholdings and warrants owned by the Board of Directors and the management at December 31, 2006 are presented on page
                                                                       98. The terms of the warrant programs are presented in greater detail on pages 94–95.




                                                                                                                                                                                                                              107
      From left to right: Timo Maasilta. Felix Björklund, Ilkka Brotherus, Anssi Vanjoki, Roger Talermo and Tuomo Lähdesmäki.




                                                                      Chairman                                                           Vice Chairman
      BOARD OF DIRECTORS                                              Anssi Vanjoki, born 1956
                                                                      • Board member since 2004. Chairman since 2006.
                                                                                                                                         Ilkka Brotherus, born 1951
                                                                                                                                         • Board member since 2000. Vice Chairman since 2002.
                                                                      • Chairman of the Compensation Committee.                          • Chairman of the Nomination Committee and Member of the
                                                                      • Executive Vice President & General Manager, Multimedia,            Audit Committee.
                                                                        Nokia Corporation. Member of the Nokia Group Executive           • Managing Director of Sinituote Oy.
                                                                        Board, Nokia Corporation. Board member of Koskisen Oy.           • Chairman of the Board of Finndomo Group. Board member of
                                                                      • Executive Vice President, Nokia Mobile Phones, 1998–2003.          Veho Group Oy Ab. Supervisory board member of Tapiola Mutual
                                                                        Senior Vice President, Nokia Mobile Phones, Europe and Africa,     Pension Insurance Company.
                                                                        1994–1998. Vice President, Sales, Nokia Mobile Phones,           • Deputy Managing Director of Hackman Group, 1988–1989.
                                                                        1991–1994. Several positions at 3M Corporation, 1980–1991.         Managing Director of Hackman Housewares Oy, 1987–1988.
                                                                      • Education: M.Sc. (Econ.).                                          Managing Director of Havi Oy, 1981–1986. Marketing and
                                                                      • Shareholding: 5,286 Amer Sports shares.                            management positions with Mestarikustannus Oy, 1977–1980.
                                                                                                                                         • Education: M.Sc. (Econ.).
                                                                                                                                         • Shareholding: 2,003,230 Amer Sports shares.




108
Felix Björklund, born 1943                                          Timo Maasilta, born 1954
• Board member since 1999.                                          • Board member since 1986.
• Member of the Compensation Committee and the Nomination           • Member of the Audit Committee and the Nomination Committee.
  Committee.                                                        • Managing Director and Chairman of the Board, The Land and Water
• Nordic Capital, Industrial Advisor.                                 Technology Foundation. Managing Director of Tukinvest Oy. Board
• Chairman of the Boards of Factorix Oy and Lamor Technics Oy.        member of Tukinvest Oy. Chairman of the Board of Tuen Kiinteistöt Oy.
  Board member of Marioff Corporation Oy, Oy Snellman Ab,           • Specialist positions with Vesi-Pekka Oy in Libya and in Finland,
  Paloheimo Oy and Lamor Group Ltd.                                   1980–1984. Water engineer with Helsinki Water District, 1979–1980.
• Managing Director of Oy Karl Fazer Ab, 1992–1998. Management      • Education: M.Sc. (Eng.).
  positions with IBM Europe, 1989–1991. Managing Director of IBM    • Shareholding: 6,073 Amer Sports shares.
  Finland, 1978–1988. Sales and management positions with IBM
  Finland and Sweden, 1966–1977.
• Education: B.Sc. (Econ.).
• Shareholding: 36,923 Amer Sports shares.




Tuomo Lähdesmäki, born 1957                                         Roger Talermo, born 1955
• Board member since 2000.                                          • Board member since 1996.
• Chairman of the Audit Committee and Member of the                 • President & CEO, Amer Sports Corporation since 1996.
  Compensation Committee.                                           • President of the Finnish Olympic Committee since 2004.
• Boardman Oy, Senior Partner.                                      • President & CEO of Atomic, 1995–1996. General Manager of
• Chairman of the Boards of Aspocomp Group Oyj and Turku              Salomon North Europe, 1993–1995. CEO/Chairman of Taylor
  University Foundation. Board member of Citycon Oyj, Scanfil Oyj,     Made Golf Company Inc, 1991–1993. Commercial Director of
  Metsä Tissue Corporation and VTI Technologies Oy.                   Salomon S.A., 1988–1991.
• Managing Director of Elcoteq Network Oyj, 1997–2001. Managing     • Education: M.Sc. (Econ.).
  Director of Leiras Oy, 1991–1997. Management positions with       • Shareholding: 22,500 Amer Sports shares.
  Swatch Telecommunications, 1990–1991. Management and spe-         • 2002 warrants: 106,800; 2003 warrants: 60,000; 2004 warrants:
  cialist positions with Nokia Corporation, 1983–1989.                66,850
• Education: M.Sc. (Eng.), MBA.
• Shareholding: 8,423 Amer Sports shares.




                                                                                                                                              Shareholdings as of December 31, 2006




                                                                                                                                                                                      109
  From left to right Juha Pinomaa, Pekka Paalanne, Paul Byrne, Michael Schineis, Roger Talermo, Max Alfthan, Jean-Luc Diard, Kari Kauniskangas and Chris Considine




                                                                       Roger Talermo, President and CEO                                Pekka Paalanne, Senior Vice President and CFO
        AMER SPORTS                                                    • Born 1955.
                                                                       • Company employee since 1995.
                                                                                                                                       • Born 1950.
                                                                                                                                       • Company employee since 1997.

        EXECUTIVE BOARD                                                • Chairman of Amer Sports Executive Board.
                                                                       • Member of Amer Sports Board of Directors since 1996.
                                                                                                                                       • Main responsibilities: deputy to the President & CEO, Finance,
                                                                                                                                         Treasury, Human Resources, Corporate Counsel, Investor
                                                                       • President of the Finnish Olympic Committee since 2004.          Relations, Information Systems, Supply Chain
                                                                       • President & CEO of Atomic, 1995–1996. General Manager of        Development.
                                                                         Salomon North Europe, 1993–1995. CEO/Chairman of Taylor       • Senior Vice President, Corporate Control and Information
                                                                         Made Golf Company Inc, 1991–1993. Commercial Director of        Systems, Kone Corporation, 1991–1997. Several positions in
                                                                         Salomon S.A., 1988–1991.                                        Kone Corporation, 1979–1991.
                                                                       • Education: M.Sc. (Econ.), Swedish School of Economics and     • Education: B.sc. (Econ.), School of Economics and Business
                                                                         Business Administration, Finland.                               Administration, Finland.
                                                                       • Shares: 22,500                                                • Shares: 12,300
                                                                       • 2002 warrants: 106,800; 2003 warrants: 60,000;                • 2002 warrants: 32,600; 2003 warrants: 16,000;
                                                                         2004 warrants: 66,850.                                          2004 warrants: 26,000




110
                                                                                                                                                              OTHER EXECUTIVES AT AMER
Max Alfthan, Senior Vice President, Communications                             Chris Considine, President of Wilson                                           SPORTS HEADQUARTERS
• Born 1961.                                                                   • Born 1960.
• Company employee since 2001.                                                 • Company employee since 1982.                                                 Eero Alperi,
• Main responsibilities: internal and external communications, brand           • President, Wilson Team Sports, 2003–2005. General Manager, Wilson            Supply Chain Development
  management.                                                                    Team Sports, 1994–2003. Director, Sales/Promotion Wilson Team Sports,        • Shares: 3,000
• Board member of Tradeka Corporation.                                           1991–1993. Various positions in Wilson Team Sports, 1982–1991.               • Warrants: 2002: 14,000, 2003: 6,000,
• Managing Director and Partner, Lowe Brindfors & Partners, 1998–2001.         • Education: Miami University (political science), USA.                          2004: 5,950
  Marketing Director, Sinebrychoff, 1994–1998. Marketing Manager,              • Shares: 0
  Sinebrychoff 1989–1994. Marketing Manager, Philip Morris, 1987–1989.         • 2003 warrants: 10,000; 2004 warrants: 17,850                                 Christel Berghäll,
• Education: M.Sc. (Econ.), Swedish School of Economics and Business                                                                                          Human Resources
  Administration, Finland.                                                                                                                                    • Shares: 350
• Shares: 1,200                                                                Paul Byrne, President of Precor                                                • Warrants: 2004: 5,950
• 2002 warrants: 8,000; 2003 warrants: 8,000; 2004 warrants:11,150             • Born 1951.
                                                                               • Company employee since 1985.                                                 Thomas Henkel,
                                                                               • Vice President, Sales and Marketing, 1985–1999.                              Information Technology
Kari Kauniskangas, Senior Vice President, Sales & Distribution                 • Education: M.Sc., Syracuse University; BA with Honors, Colgate University,   • Shares: 0
• Born 1962.                                                                     USA.                                                                         • Warrants: 0
• Company employee since 1984.                                                 • Shares: 0
• Main responsibilities: Amer Sports world-wide subsidiary and distribution    • 2002 warrants: 20,000; 2004 warrants: 17,850                                 Tommy Ilmoni,
  network, customer relations.                                                                                                                                Investor Relations
• President/General Manager, Amer Sports Europe, 2000–2003. Interim Gen-                                                                                      • Shares: 1,000
  eral Manager, Amer Sports Europe, 1999–2000. Various positions, Wilson       Michael Schineis, President of Atomic                                          • Warrants: 0
  Sporting Goods, 1991–1999. Various positions in Amer Group Ltd, 1984–1991.   • Born 1958.
• Education: M.Sc (Econ), Finland.                                             • Company employee since 1996.                                                 Kai Tihilä,
• Shares: 1,650                                                                • President of Atomic Austria GmbH since 1996.                                 Business Planning & Control
• 2002 warrants: 15,000; 2003 warrants: 6,667; 2004 warrants: 22,300           • Member of the “Beirat für Wissenschaft und Forschung des Landes              • Shares: 300
                                                                                 Salzburg“. Member of the Board of Bulthaup GmbH & Co.KG.                     • Warrants: 2002: 7,250,
                                                                               • General Manager Germany of Salomon GmbH, 1993-1996. Member of                  2003: 4,000, 2004: 5,950
BUSINESS SEGMENTS                                                                management team of CONTOP (advertising agency), 1989-1993.
                                                                               • Education: MBA Econ. PhD (Dr.rer.pol.), Germany.
Jean-Luc Diard, President of Salomon                                           • Shares: 0
• Born 1957.                                                                   • 2002 warrants: 33,400; 2003 warrants: 10,000; 2004 warrants: 17,850
• Company employee since 1982.
• Brand Director Salomon, Head of Softgoods and Head of new projects,
  Salomon Design Center USA, 1996–1998. Head of Salomon alpine boots,          Juha Pinomaa, President of Suunto
  snowboard and inline skates, 1994–1997. Head of Salomon alpine boots,        • Born 1961.
  1992–1993. Marketing Director Salomon Winter Sports, 1990–1992.              • Company employee since 2005.
  Marketing Director Salomon Ski, 1985-1990. Marketing Manager Salomon         • Vice President, Entry Business Line, Mobile Phones Business Group, Nokia,
  Austria, 1983–1984.                                                            2004–2005. Director, Product Marketing & Business Development, Mobile
• Education: Ecole Superieure de Commerce de Paris business school,              Entry Business Unit, Nokia, 2002–2003. Various positions in Nokia Mobile
  France.                                                                        Phones 1988–2001.
• Shares: 0                                                                    • Education: MBA (Finance), Wharton Business School, University of
• Warrants: 0                                                                    Pennsylvania, USA. M.Sc. (Industrial Management), Helsinki University of
                                                                                 Technology, Finland.
                                                                               • Shares: 0
                                                                               • Warrants: 0                                                                  Shareholdings as of December 31, 2006.


                                                                                                                                                                                                       111
      INFORMATION FOR
      INVESTORS


      ANNUAL GENERAL MEETING                                           FINANCIAL REPORTS                                              INVESTMENT ANALYSTS
      Date and time: Thursday, March 8, 2007 at 2:00 p.m.              Amer Sports publishes its annual and interim reports in both   The following companies, among others, published invest-
      Venue: Amer Sports Corporation Headquarters,                     Finnish and English. The publications can be ordered from:     ment analyses and research on Amer Sports during 2006:
      Mäkelänkatu 91, Helsinki.
                                                                       Amer Sports Corporation, Communications,                       ABG Sundal Collier
      Shareholders who have been entered in Amer Sports                P.O. Box 130, FI-00601 Helsinki, Finland                       ABN Amro
      Corporation’s shareholder register, administered by Finnish      Tel. +358 9 7257 8309                                          Carnegie
      Central Securities Depository Ltd, no later than February 26,    Fax +358 9 791 385                                             Danske Bank
      2007, have the right to attend the Annual General Meeting. In-   amer.communications@amersports.com                             Deutsche Bank
      structions for submitting notice of attendance will be                                                                          Evli Bank
      given in the convocation to the Annual General Meeting,          The annual and interim reports as well as stock exchange       eQ Bank
      which will be sent to shareholders, and on the company’s         releases are available on the company’s website at             FIM Securities
      website at www.amersports.com.                                   www.amersports.com.                                            Handelsbanken
         Shareholders can exercise their right to make decisions                                                                      Kaupthing Bank Oyj
      concerning the company at a properly-convened General            PUBLICATION DATES FOR 2007                                     Mandatum Securities
      Meeting by either being present themselves or through au-        February 13    Financial results for 2006                      Merrill Lynch
      thorized representatives.                                        March          Annual report                                   Opstock Securities
         In addition to the matters specified as being the business     April 25       Interim report January–March                    SEB Enskilda
      of Annual General Meetings, as set forth in the Finnish Com-     May 24–25      Capital Markets Days                            Standard & Poor’s
      panies Act, a shareholder can submit a written request to        August 9       Interim report January–June                     Öhman
      the Amer Sports Board of Directors that a certain matter be      October 24     Interim report January–September
      dealt with at the General Meeting. The written request must
      be submitted to the Board of Directors early enough that the     SILENT PERIOD
      matter can be included in the Notice of Meeting. The Board       Amer Sports observes a three-week silent period before
      of Directors must convene a General Meeting without delay        releasing each set of financial results. During this time,
      to deliberate on a certain matter if requested by the auditor    the company’s management does not discuss matters with
      or a shareholder or shareholders owning at least 10% of all      market participants.
      the company shares.

      PAYMENT OF DIVIDEND
      The Board of Directors proposes that a dividend of 0.50 euros
      per share be paid for 2006, representing a dividend ratio of
      51%. A dividend of 0.50 euros per share was paid for 2005.




112
CONTACT INFORMATION



AMER SPORTS CORPORATION                      PRECOR                               The contact information for the Group’s locations is
Mäkelänkatu 91                               Precor Incorporated                  kept up-to-date on the Amer Sports website at
FI-00610 Helsinki                            20031 142nd Avenue NE                www.amersports.com. The contact information for
P.O. Box 130                                 P.O. Box 7202                        importers can be found on the websites of the business
FI-00601 Helsinki                            Woodinville, WA 98072-4002           areas. Contact information can also be requested by
FINLAND                                      USA                                  telephone +358 9 7257 8309, by fax +358 9 791 385, or
Tel. +358 9 725 7800                         Tel. +1 425 486 9292                 by e-mail at amer.communications@amersports.com.
Fax: +358 9 7257 8200                        Fax: +1 425 486 3856
E-mail: amer.communications@amersports.com   www.precor.com
www.amersports.com
                                             ATOMIC
SALOMON                                      Atomic Austria GmbH
Salomon S.A.                                 Lackengasse 301
FR-74996 Annecy Cedex 9                      AT-5541 Altenmarkt
FRANCE                                       AUSTRIA
Tel. +33 4 50 65 4141                        Tel. +43 6452 3900 0
Fax: +33 4 50 65 4260                        Fax: +43 6452 3900 120
www.salomonsports.com                        E-mail: info.atomic@amersports.net
                                             www.atomicsnow.com
WILSON
Wilson Sporting Goods Co.                    SUUNTO
8700 W. Bryn Mawr Avenue                     Suunto Oy
Chicago, IL 60631                            Valimotie 7
USA                                          FI-01510 Vantaa
Tel. +1 773 714 6400                         FINLAND
Fax: +1 773 714 4565                         Tel. +358 9 875 870
E-mail: askwilson@wilson.com                 Fax: +358 9 8758 7300
www.wilson.com                               E-mail: press@suunto.com
                                             www.suunto.com
P.O.Box 130, FI-00601 Helsinki
Street address: Mäkelänkatu 91
FI-00610 Helsinki
Tel. +358 9 7257 800
Fax +358 9 7257 8200

www.amersports.com

Domicile: Helsinki
Business ID: 0131505-5

								
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